The mountain of debt that has been imposed on many companies in recent years, including through private equity companies, will be a major challenge for those companies for years to come. This is being exacerbated by expiring funding from standard sources, which will need refinancing. Many of the banks are still being tight fisted about handing out finance, be it follow-up financing or newly arranged investment. The Steinbeis Consulting Center for Medium-Sized Businesses Financing and Investments is helping companies find alternatives.
Institutional and private investors have helped many companies over the past 18 months with capital in the form of loans. This independent backing is attractive to companies as it provides financing over a period of between five and seven years. Very often, the loans are at much lower interest rates than existing credit with companies’ normal banks. The terms and loan agreement are matched to the individual needs of the company.
The Frankfurt-based Steinbeis Consulting Center for Medium-Sized Businesses Financing and Investments is currently working with a packaging company with a strong leaning towards the drinks industry. The order books are currently quite full and excellent growth is forecast, especially in eastern Europe. At the beginning of 2010 the company directors turned to the Steinbeis financing experts after its bank said it could not provide the funding it needed to fuel growth.
The first step was to evaluate current finances and estimate the amount of backing actually needed. In close cooperation with the company’s managing director, an independent financing concept was drafted. The team then decided which institutional investors to approach, and how to negotiate the convenants and terms. The loan was facilitated in July 2010.
The experts at the Steinbeis Consulting Center for Medium-Sized Businesses Financing and Investments are currently providing financial advice to a number of companies from the food & drink, IT services, sustainable energy, electrical engineering, and transportation engineering industries. The center has a reliable network of institutional and private investors.
Christian Schulte, Dieter Dorn
Steinbeis Consulting Center for Medium-Sized Businesses Financing and Investments (Frankfurt)
su1180@stw.de