Debt Financing
Who can raise debt?
Businesses that,
1- Have profitability history, Or/And
2- Have assets that can be pledged as security.
Whether it is a bank loan or a private lending agreement, lending represents a commitment that could be a burden on the business cash flow Or a way to increase its value and profitability. In all cases, the business file has to speak up for the lenders and build confidence.
We enable businesses to showcase and build confidence.
Debt Financing
Debt from banks has been based on the capability of the business to pay, on time, the principal and the service. We enable SMEs with all Debt Financing:
Financial Analysis: To assess why the debt is required, ways of substituting it organically or by other means of financing.
Credit Analysis: To assess the cash flow capability to serve the proposed amount for the proposed tenure and solutions that could enhance it.
File assessment and preparation: The properly prepared file presented to any creditor will minimise the time of the creditors and allow them to quickly process it as well as it showcases the business, its seriousness and capability.
Lenders Screening: Many available lenders with a range of criteria and requirements, we help you target the lender that matches your business capabilities and supports your business in a matter that does not burden the capability of growth.
Bank Loans
+ Could be the cheapest way of financing for SMEs
+ Straightforward in its cash flows
– Strict and rigid in its terms
– Collateral usually included
– Requires longer time spams for approvals and disbursement
Non-bank Loans
+ Flexible and usually includes potential synergies
+ Faster in term of approval and disbursements
+ Could not include collateral
– Requires legal and financial advice
– May be transferred to ownership in case of default
- Average bank rejections rate in Egypt 66.6%
- Percentage of SMEs that require professional financial advice 83%
- Percentage increase of loan value after professional financial advice 50%
Before borrowing 3 fundamental questions have to be considered
- What is the best option for business financing needs?
- Who are the possible providers to approach, banks, institution or private?
- Can lending cover all the financing needs without hurting cash flows?
Our commitment is to empower businesses.
Saving them money, time and effort in a long process.
Many businesses can cover their own working capital or investment capital needs without borrowing.
After the lending decision is made, It is very important to prove to the lenders the business creditworthiness and solvency of the business. The main source of bank loans rejections (as per EBI. SME unit publications) is lack of strong accounting. 75% have no business plans and feasibility, and many are also rejected due insufficient collateral.
Proper financials must match the capital providers` requirements based on the business case, and/or put in place a:
- Business plan
- Feasibility study
- Financial analysis
The main requirements for a loan are the basic documents (Registration, license, tax card…), Financial Performance and 2 to 3 years of existence (Audited Accounts).