It is clear that structuring and managing debt is front of mind for entrepreneurs, business owners and private equity firms, particularly when managing growth. However, adding recent economic upheavals into the mix means that any credit applications will need to be carefully handled; with even re-financing and managing existing debt likely to become increasingly challenging.
Identifying the right debt structure for your business, as well as ensuring the correct timing of the application, will also be critical to ensuring a positive outcome. And in times of additional financial stress, there should be increased levels of dialogue with lenders, investors, private equity sponsors and other stakeholders from early on in the process in order to ensure a successful application.
In some cases, we are now seeing credit funds starting to withdraw offers, at a time when lending will be used as a critical survival tool to help businesses manage cash flows and other day-to-day pressures as well as funding growth. But this isn’t cause for panic, it simply means a more nuanced approach to finding the right funding solutions and financing partners is required.
In the midst of these current challenges, however, LAVA continues to support numerous businesses, across a range of sectors, who are raising debt to support acquisitions, employee buy-outs and other active growth strategies. We have recently agreed a trio of such deals, including advising Lyon, an IT managed service provider, on the acquisition of IT consultants Nittygritty.
It was fantastic to work with Amin and his team on the financing and execution of the Nittygritty acquisition. We look forward to working with Lyon going forward to support their ambitious growth journey.
Hamish Martin Partner, LAVA Advisory Partners
In any market, it is important that you identify the right source of finance to support your business’s ambitions then carefully set out the process that will help you access the optimal debt structure for value creation; whatever stage your business is at.
LAVA can help identify the right source of finance to support your business’s ambitions and assist in executing your plans. To discuss this further please contact Hamish Martin.