New times ahead for company financing?

September 15, 2023 Ernest Partners

๐Ÿ”Ž ๐Ÿ’ฐ New times are here! Are we also going to see the energy and mobility transition revolutionize the bonds market ?ย 

โ†ฉ Old School: You discuss with your Corporate Banker your long term funding need. Your banker offers to structure a bond. Lots of back and forth, financial models are turned around, (disappointing) credit ratings are issued and finally 6 to 9 months later your bond is out in the market. The bank has a pre-listed set of institutional investors and private banking clients to gather the needed funds. The costs are high, the returns for the investors always too low.

โ†ช The new way: As a company you have a great product, a loyal client base which is following your corporate adventure and enjoys your products and services. These clients are that loyal that they even wish to invest in your company. Of course they can buy shares (if stocklisted), but you are growing and not in a position to pay (high) dividends. Next to that your traditional banks and financiers are reluctant on providing the level of funding you really need and you feel held back in your ambitions by your bank.

๐Ÿ’ก The solution, use your client base! In these times of high interest rates for loans but low interest rewards on saving accounts, a corporate bond can be an interesting alternative.

๐Ÿ— Next to that, since you have a strong client base as a Corporate, you donโ€™t need the network of a bank to get fundings out of the market.  Make sure to ๐—ต๐—ฎ๐˜ƒ๐—ฒ ๐˜๐—ต๐—ฒ ๐—ฟ๐—ถ๐—ด๐—ต๐˜ ๐—ฝ๐—ฒ๐—ผ๐—ฝ๐—น๐—ฒ ๐—ถ๐—ป ๐—ฝ๐—น๐—ฎ๐—ฐ๐—ฒ to create an information memorandum to fulfil the legal requirements, ensure an easy online payment method, set automatic bonds allocation and off you go! 

Is this idea tilting something with you? Letโ€™s have a discussion on how Ernest Partners can help you securing your long-term funding.