Fundraising, Strategic Management
When banks are obsolete for fundraising, what options exists for businesses?
How to identify and work with private equity and alternative fund sources.
Stressed industries would have already leveraged all banking options, making it impossible to attract further lending. With increased tightening of regulations within the banking sectors, with even a single missed payment resulting in categorization of a business as Non Performing Asset, the ability source funds for legitimate business is becoming increasing difficult.
PROBLEM / OPPORTUNITY STATEMENT
Assets, Work Orders, Principal Clients, Portfolio, none of it matters if a business is stressed. New lenders do not accept the risks and would shy away from further investing, even when disproportionate asset by value is attached to the debt amounts.
Regulations apart, the intense competition and availability of similar service providers make the risk higher for work order provider when the business is under stress, to mitigate supply chain risk, they may be looking at alternative service providers, thereby nulling a work order.
Good performing companies can easily endup in stress mode with globally impactful events such as Wars, Biological Disasters and rules do not bend sufficiently enough to allow for such stress to endured.
A cluster or lead bidder with better financials is provided as the main contractor and work order is placed to the lead bidder. The assets and manufacturing capability, working capital is lent against the cluster's collective strength and the source of funds is either from the lead bidder or private, alternative financial institutions.
APPROACH TO SOLUTION
Case to case based analysis is done and depending on the capabilities and audit of capabilities, the program is designed. Using existing network, the business is presented for partnership, investment among likely to be interested players.
KEY SOLUTION METRICS
Approach should provide work, fund supply for work execution, performance of work should alleviate stress of participant business for whom the efforts are undertaken.
Time is a key factor involved in achieving recovery and it often is not available in apt amounts.
Program design is aimed at providing an advantage to the participant and is often connected with larger, demand integrated products for manufacturing.
Remediate current financial stress, allows for increase in revenue and stabilizes the operation.
New product capabilities are often an impact on the manufacturing, providing increased runway for the businesses
KEY BENEFITS OF SOLUTION
Businesses are able to move away from non-performing status and revive their market credits with regular financial institutions.