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Corporate Financial Services
To keep the financial wheels moving, corporate finance services are provided to by the corporate finance companies. One way of providing corporate finance service is by asset based business loans. Business loans are also used to improve cash flow, restructuring the business, debt consolidation and as working capital.
The financial services offered by the corporate finance company may be discussed in detail under the following heads:
Asset Based Lending
Asset based financing is the method of obtaining loans by keeping assets as security. The corporate company can use either liquid, current assets or fixed asset as collateral to obtain the asset based corporate finance service. The volume of the asset-based finances is a function of the value of the underlying asset that is used as the collateral. The asset-based lenders are known as the secured lenders. The asset-based finances provide the following corporate finance solutions:
- The asset based lending is used at the time of merger, acquisition or buy out.
- The asset based lending is used for debt restructuring and commercial refinancing.
- The Asset Based Lending is used to meet the working capital needs.
Cash Flow Lending
Cash lending need can arise in response to seasonal requirements, business expansion or cyclical business swings. The cash flow financing experts can share their knowledge and expertise to help in the cash flow management. The cash flow financing instruments provide the following corporate finance solutions:
- Cash flow lending is required at the time of acquisition, merger or buy out.
- Cash flow lending is required to meet working capital needs.
- Cash flow lending is required to meet mezzanine financing, recapitalization and spin-offs.
Second Lien Loans
The second Lien Loans are also known as Secondary Collateralized Institutional Loans used mainly for recapitalization. Recapitalization is the process of drawing out dividends and substituting the more expensive mezzanine with the less expensive SCIL financing and buying out financing. The SCIL is a much more flexible corporate finance service as compared to mezzanine and other corporate capital solutions.
The Secondary Collateralized Institutional Loans provide the following corporate financial solutions:
Corporate Debt Restructuring
This corporate financial service is meant to clear the past debt burden. Debt Restructuring adds gives a different and new look to the company. Business restructuring can be done by the use of cash flow provided by commercial refinancing.
For proper corporate debt restructuring the following corporate financial solutions are provided:
- Asset based loans are provided for Corporate Debt Restructuring.
- Debtor-in -possession financing is provided for Corporate Debt Restructuring.
- Plan of Reorganization Financing is provided for Corporate Debt Restructuring
- Revolving Credit Facilities are provided for Corporate Debt Restructuring.
- Senior Secured Debt is provided for Corporate Debt Restructuring.
- The corporate finance solutions as mentioned earlier may be explained as follows:
Acquisition, merger and buy out financing :Such corporate finance services are lent out to companies who wish to leverage the economies of scale, new technologies or choose to enter into new markets. Different financial packages are available, like the Asset based lending and cash flow loans to meet such ends.
Business Debt consolidation financing
This corporate financial service helps to restructure business by refinancing past term and equipment loans to match cash flow.
Growth and working capital needs :Working capital needs may arise from the desire to expand business, globalize or updating infrastructure. The different corporate finance services are available to fulfill these desires.
Corporate Debt Restructuring and commercial refinancing : Corporate debt Restructuring helps to clear the past debt and adds new spirit to the company. Commercial refinancing is no longer the best method of corporate debt restructuring but other methods like the asset based lending, revolving loan facilities, term loans and senior debt are much more valuable.
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