The benefits of using debt for leverage, cash flow and increased earnings has never been greater
Nationally operating low tech high labour content service provider. Main issue cash flow for growth and acquisitions. Hampered by senior lenders’ loan to valuation ratios, amortisation requirements and restrictive lending covenants supported by fixed and floating charges and personal guarnatees. Channel Finance revalued the vehicle, plant and equipment portfolio and advanced substantial funds with low amortisation recognising the long economic life of the units and security only over those assets, lighter covenants and no personal guarantees. Putting additional cash into the business enabled the company to double cash flow and increase earnings by 25%.
A nationally operating distributor of automation equipment to SMEs found sales difficult because the high price of the units was difficult for customers to finance from their banks. The company had resorted to high discounts on price and service to close sales. Channel Finance designed and delivered a vendor finance solution with operating leases of 10 years (the effective economic life of the equipment). This facility did not disturb existing funding arrangements for the customers but enabled them to pay rentals that were lower than the wages of staff replaced by the automation equipment.
Finance secured by receivables has proven problematic for many businesses.
The Channel Finance offering overcomes these common problems:
- investment-grade credit rating required by bank
- perceived credit risks associated with growing companies with a limited equity base
- high establishment costs
- low maximum limits on funding non-investment trade debtors
- customer concentration issues though exposure to large debtors such as supermarkets
- onerous and complex reporting requirements.
Property Secured Finance
Channel Finance provides finance secured by mortgages up to high levels of leverage on a first, second or caveat lending security.
Loans may be provided on an amortising or an interest only basis.
Loan terms range from months with short term bridging finance to longer terms of years.
Vehicles, Plant and Equipment Finance
Channel Finance offers leasing, chattel mortgages and other finance facilities. A feature of Channel Finance’s facilities is the ability to revalue and refinance portfolios of existing equipment and to extend the term in recognition of the economic life of the assets. Channel Finance establishes vendor finance programs for businesses that can profit from controlling the source of finance and sell on finance payments.
For inventory that is storable, identifiable and marketable Channel Finance can offer finance facilities or use it as collateral to increase leverage against other assets.
Unsecured Finance and Corporate Bonds
For businesses with proven management and profitability Channel Finance can offer finance. This is particularly relevant to businesses with large intangible assets on the balance sheet.
Growth Capital Funding
For businesses requiring expansion capital and growth funding. Companies that are looking for capital to expand or restructure operations or enter new markets. Growth capital can also be used to effect a restructuring of a company’s balance sheet, particularly to reduce the amount of leverage the company has on its balance sheet.
For businesses requiring acquisition funding or to finance a significant acquisition without a change of control of the business.
Property Development Debt Funding
Typically provided with higher leverage than banks and with more favourable conditions precedent, repayment terms and covenants
Available to experienced developers in proven areas
Presales Finance Facility
A unique facility that enables developers to achieve the required number of presales through securing the final dwellings or to enable foreign buyers to be counted
Available in association with Cullen Capital