Innovate to Survive

Posted on: April 4th, 2016

Have you ever wanted to take a picture underwater? You are just swimming around and think, “Wow this would be a great time for a picture!”

Cell phone companies are continually researching ways to redefine mobile technology—pushing the envelope to see how far the technology can go. Their ability to develop new products is directly tied to their ability to create growth capital. Growth capital is critical to fueling any rapid expansion.

Most companies struggle to find suitable growth capital on their own. Successful sourcing requires a platform of growth capital lenders and market expertise. The providers of capital look to understand the company’s cash flow dynamics and potential growth of the business with the capital.

The business will need to put together a model based on potential of the company with the capital. Companies in newer industries will need capital quickly to scale and participate in fast moving markets.

It is important when looking for growth capital to have an experienced, financial consultant on your side that can help you form the best financing structure for your business’ growth.

During their underwriting processes, acquisition financing providers analyze probable performance projections for their proposed borrowers. The underwriter often toggles between a few scenarios to sensitize the growth variables leading to slower revenue and margin growth over time. The lender’s underwriting view is usually an extension of its credit intelligence and historical experience.

Mezzanine debt loans occupy the risky echelon beneath the bank but ahead of the equity in a capital structure. They are naturally subordinated to the bank loan via an intercreditor agreement wherein the senior lender retains the power to block their interest or force them to standstill.

In the middle market, acquisition financing providers are regarded as super intelligent and hardworking. They have distinguished themselves at elite banks or consulting firms and possess the ability to synthesize voluminous levels of info into a coherent, succinct takeaway or observation. This skill is extremely valuable in attributing causation to business drivers in a financial model used to foretell the future.