THE FINANCING QUESTION
When this becomes relevant.
Start with the business circumstance, rather than choosing a product in advance.
- An established company needs liquidity to support new contracts or seasonal activity.
- A profitable business has a gap between supplier payments and customer collections.
- Management wants to fund expansion without putting daily operations under strain.
- Existing short-term debt needs to be examined against the useful life of what it financed.
THE ASSESSMENT
What we examine.
These considerations shape the financing discussion and the information required for a meaningful review.
| Review area | What matters |
|---|---|
| Operating cycle | The timing of inventory purchases, delivery, invoicing and collections; seasonal peaks and concentration. |
| Repayment capacity | Historical earnings, current trading, existing payments and the assumptions supporting new debt service. |
| Facility design | Term, amortization, availability, security, guarantees, covenants and any refinancing dependency. |
THE STRUCTURING PERSPECTIVE
A plan that fits the situation.
Working capital should finance the operating cycle. Long-lived expenditure may need a different maturity. We assess the complete debt schedule so that a new facility does not create a short-term improvement at the expense of future liquidity.
TRANSACTION READINESS
What to prepare.
Begin with a concise overview. Detailed and sensitive records follow through an agreed delivery method.
- Historical and year-to-date financial statements, with management explanations for material changes.
- Tax returns, business bank statements and a current schedule of debt and payments.
- A use-of-proceeds schedule, forecast and explanation of the timing of the capital need.
The document list is indicative. The agreed service role, lender requirements and transaction circumstances determine the final package.