A company may need to borrow money for a number of reasons it may require working capital (operating expenditure) to solve cash flow problems, it may need funds for a particular acquisition (capital expenditure) or it may need a larger sum of money to solve a financial crisis.
The purpose of the borrowing will have a big influence on the type of facility entered into. The main aim of any finance arrangement entered into by a corporate entity is to create or maximize value through the choice of the most suitable finance structure. This covers share structure, buying and selling assets and companies, and raising money through equity or debt finance.
Our services mainly focus on debt finance, and specifically, corporate loan facilities provided by banks (for more on lending by non-bank lenders such as insurers, pension funds, and direct lending funds.
The choice of product, vehicle or structure is very important as the wrong choice could result in cash flow problems, under performance (leading to dissatisfaction among shareholders and other investors) and, ultimately, insolvency.
This area is made more complicated by the ever-changing nature of products and the underlying economics. These changes will often be difficult to predict, not least because they may be influenced by external factors, which are beyond the control of the parties, this means that review at regular intervals is important.