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Structured Financings
Often middle-market companies outgrow their financing sources or find they're not adequately leveraging their balance sheet or cash flow with traditional bank debt. When this occurs, a company may need to restructure its balance sheet.
The first step required when contemplating a restructuring is to consider all options including, asset based loans, senior cash flow loans, institutional private placements, equipment financing, mortgages, asset securitizations, operating or capital leases, leveraged leases, sale and lease backs, subordinated debt, preferred stock and common equity. Often more than one capital alternative will be chosen in order to minimize dilution to the shareholders. With a myriad of options and alternatives available, companies may need to engage an advisor to help them through the process.
Every form of capital has its positive features, its constraints, and a cost. We review and evaluate the implications of these various forms of capital by preparing the client's pro-forma results with an analysis outlining the ultimate effect on shareholder value. We then work with management in determining which option or options will prove effective in helping the company achieve its goals while minimizing cost.
When different financing options are being invested, understanding all of the structural implications and intricacies of closing multiple financings is important. This process can be tedious and have long-term effects on a company's balance sheet. We will help you in analyzing the relative costs and benefits of various options in deriving the best overall strategy for your specific situation.
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