Company debt refinancing changes the debt structure to improve debt capacity and reduce debt service cost.

Bridge financing provides an interim financing solution or a temporary increase in current financing.

The impetus for refinancing be include management buyouts, which can facilitate succession, an interim bridge financing solution, a business facing operating stress or needing financing for a rush emergency or opportunity situation, a restructure, or the need to replace an existing debt financing. The amount, flexibility of its repayment terms and conditions, pricing, and security are frequently the critical issues. 

Lenders' criteria, appetite, and pricing can vary widely, particularly between banks, non-bank, and private debt lenders. Each Lender applies their own unique approach to evaluating refinancing, and there are many specialized lenders that focus on particular aspects such as the business assets, the business case, cash flow, enterprise value and the stage of the business (growth, mature, early-stage).  

Debt & Bridge Financing - Common challenges: 

• Lender declines requested amount
• Existing loan facilities cut back
• Tightening of security, terms, or conditions
• Planned refinancing will take too long
• A turnaround or the business has experienced a difficult period
• Significant new business revenue anticipated
• Buying for new orders, or new equipment
• Restrictive advance rates, collateral security margin
• Cannot meet pre-funding conditions
• Financing required immediately, or very soon
• Cannot pay suppliers on time
• The lender has demanded its loan repayment

Solution

A debt or bridge financing can be complex or appear relatively straightforward at face value, however, in most instances, a variety of options and approaches need to be considered, quantified, and evaluated to achieve the most desirable outcome. Results also needs to be achieved in an efficient time window. An in-depth presentation focused on the key issues, management and how business operations, cash flow and/or its assets can support the required repayment. 

We identify the likeliest financing scenario, expected pricing, and most suitable lender(s). Building a lending case, we draw on our previous experience with debt and bridge financing structures and drill down into the details to ensure alignment with each prospective lender and solution.

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