We work with clients to navigate and structure their financing, minimize dilution and determine if proceeding towards equity and equity like capital is a viable route to take.

Non-traditional capital, often referred to as alternative capital, is fairly broad in nature. This category of financing typically includes capital outside the scope of traditional equity and debt. Characterized as situational, opportunistic, or alternative funding, they can provide senior private, subordinated, or convertible debt, equity or a hybrid combination.

Non-traditional capital can be required to fund growth, capital projects, acquisitions, and to recapitalize a business for a variety of reasons, including restructuring, succession, or to provide the funding for transactions between shareholders and shareholder distributions.

Non-Traditional Capital – Common challenges:

• Feasibility of financing
• Handling gaps in financing strategy
• Establishing mix of equity, debt, and non-traditional capital
• Financial forecasting and modeling capital structure
• Calculating equity/lender return and credit ratios
• Gaining alignment with sources of non-traditional capital

Solution

Non-traditional financing requires the business strategy to connect to the financing strategy. This requires in-depth analysis and packaging of detailed financial forecasts that articulate business goals, plans and tactics, the application of funds, the return on investment in conjunction with cash flow ability to service debt and repay loans. Sensitivity analysis is applied to measure risk and define stress tests. There are specialized providers that focus on these types of financing and they place greater reliance on future business plans and financial forecasts over historical performance.

We connect the business strategy to the financing requirements and identify the options to best-case financing structure, the cost of financing, most suitable provider(s). To build a financing case, we draw on our previous experience within this financing class and drill down into the details to ensure alignment with each prospective lender and solution.

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