Debt Financing Procedure
Debt Financing Procedure (Banks)
We can take over a large part of your request for a bank financing, for example for growth and acquisition of a business. We support you in drawing up the long-term budget, and we can draw up the financing memorandum for you. We have some excellent relationships with various banks, we assist you to find the right bank, and we can give you good advice on the credit application to finance your business.
1. The preparation stage of a debt financing procedure
1a. Determine financing needs
To map out your future financing needs, you should have a good vision of your future strategy, preferably worked out in a business plan. A multi-annual budget can be drawn upon the basis of this business plan. In addition to a result budget, this budget consists, besides revenue and specified costs, of a cash flow, which includes future usage in working capital and investments in assets. The financing requirement can be determined on the basis of the liquidity needs.
Based on the banking standards known to us, an estimate can be made of the extent to which the financing is bankable. If necessary, we can also support you in raising capital through, for example, informal investors / private equity firm.
1b. Drafting financing memorandum
The financing memorandum must contain sufficient information to give a financier insight into the most critical business data, the financing requirement, use of finance and the sustainability of the financing. The financing memorandum includes the company profile (activities, customers, suppliers, competitors, etc.), the liquidity budget and cushion with explanatory notes and the interpretation of the financing requirement.
The possible financing structure should be determined on the basis of the feasibility analysis and outcome of the negotiations. What is the size of the financing, which forms of financing are applied for (long-term loans, financial lease, factoring, current account, mezzanine [a hybrid of equity and debt financing] etc.) and what are the related maturities. We as Asia Investment Services can advise you on all these aspects.
2. The financing stage of a debt financing procedure
2a. Approaching banks
The financing memorandum can be filed with one or more banks. This leads to optimal market operation. Only by mutual agreement selected the financiers will receive the financing memorandum, after which we will arrange an introductory meeting.
In this meeting, all further information can be provided that the financier needs to analyse the credit application. On the basis of the information provided, we will ask the financier to substantiate his interest through a credit proposal.
2b. Assess credit proposals
We will analyse the credit proposals received, looking at the scope, the collateral and the flexibility in addition to the costs. In mutual consultation, it will be decided with which financier the process will continue and the loan proposal will be concluded.
In this example, we have only limited ourselves to a bank financing, of course, there are multiple financing possibilities. We are keen to analyse in advance all possible alternatives in consultation with you. Asia Investment Services can assist you in advice and acquisition of the financial resources for your business.