Financial Advisory Services

Business Financing
Most small to medium sized businesses go through various growth spurts and business stages and matching the right form of finance to the stage at which a business is at is critical to it’s success.

Other key factors affecting the finance decision are:

• Mind set of shareholders with regard to control
• Bank relationships
• Business risk levels as perceived by the capital markets
• Customer base and needs
• Is the business capital intensive ?
• Is there seasonality or business cycles which affect working capital needs?
• Loan covenants – are they right for the business?
• Is the business in need of financing hard (machinery) or soft assets such as intangibles - Intellectual property?
• Sales growth
• Human resource requirements versus working capital availability
• International or domestic finance needs or both?
• Project finance for customers – domestic or international
• Credit policies and payment collection processes
• Vendor relationships and payment terms
• Foreign exchange risks in cash flows
• Inventory needs
• Corporate facilities – virtual or investment in location(s)
• The working capital or cash cycle of the business
• Fixed versus variable business costs
• Historical financial and business performance
• Expectations for the future in terms of margins, profits, investments, competition

The above are just a few of the many considerations that must be evaluated before an optimal business finance decision can be made.

Once the above are evaluated you need to ensure that a clear view of the business is available from a planning and forecasting perspective. Both the Business Managers and Sources of Finance will require this documentation. What is needed?

• Up to date business plans
• Cash forecasts
• Strategy documentation – plans etc.
• Shareholder agreements
• Customer supply agreements
• Vendor supply agreements
• Other as determined by the complexity of the financing needed

Sources of finance and working capital can range from traditional sources such as:

• Bank Finance
• Investors

To structured Operational Financial arrangements that meet a specific need:

• Trade finance
• Specialized leasing transactions
• Export finance and insurance

To more complex and lengthy transactions such as:

• Private equity Share sales
• Subordinated debenture finance
• IPOs
• Venture Capital
• Partnership investments

And of course would encompass financial support from government and government agency sources:

• Gov’t grants
• Subsidies
• Loan guarantees
• Direct investment

Clausen & Associates are experienced at guiding businesses through this process. We have a focused structured approach that leads to the optimal results.