Funding Structures & Capital Options Guide

Introduction

Corporate funding is not a one-size-fits-all solution. The structure of capital directly impacts cash flow, risk exposure, balance sheet strength, ownership control, and long-term strategic flexibility.

A well-designed funding structure aligns the purpose of the finance with the business model, asset base, revenue profile, and future growth objectives. Understanding the available capital options allows businesses to make informed decisions and avoid over-leveraging, pricing inefficiencies, or structural constraints.

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Core Funding Structures

1. Senior Debt Facilities

Traditional secured term loans forming the foundation of most capital structures.
Typically used for acquisitions, refinancing, development, or capital expenditure.

2. Revolving Credit Facilities (RCF)

Flexible facilities allowing businesses to draw and repay funds as needed.
Primarily designed to support working capital and liquidity management.

3. Invoice Finance & Factoring

Funding secured against receivables to accelerate cash flow cycles.
Suitable for trading businesses with strong debtor books.

4. Asset-Based Lending (ABL)

Facilities secured against tangible assets such as plant, stock, machinery, or property.
Optimises capital efficiency by leveraging operational asset value.

5. Trade Finance & Letters of Credit

Structured solutions supporting import/export transactions and cross-border trade.
Often structured in multi-currency formats for international businesses.

6. Mezzanine & Hybrid Capital

Subordinated or structured capital bridging the gap between senior debt and equity.
Commonly used in leveraged transactions or expansion phases.

7. Equity & Joint Venture Capital

Minority or strategic equity participation aligned with long-term growth strategy.
Used where leverage must be balanced with risk mitigation.

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Capital Stack Considerations

In many cases, funding is layered across multiple instruments — combining senior debt, revolving facilities, mezzanine, and equity — to optimise leverage, pricing, and risk allocation. The appropriate structure depends on business resilience, asset strength, sector exposure, and shareholder objectives.

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Conclusion

Selecting the correct funding structure is as important as securing the funding itself. An appropriately structured capital framework enhances financial stability, supports operational flexibility, and positions the business for sustainable growth or future transition.

Understanding capital options from a strategic perspective enables informed decision-making, improved lender alignment, and stronger long-term financial outcomes.

Credit Assessment & Approval Criteria Guide

Understanding how lenders and capital providers assess transactions is critical to structuring successful funding solutions. Credit approval is not based on a single metric — it is a holistic assessment of borrower strength, asset quality, financial performance, risk exposure, and exit clarity.

Below are the key criteria typically evaluated during underwriting.

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1. Borrower & Sponsor Strength

Lenders assess the credibility, experience, and track record of the sponsor or management team.

Key considerations include:

• Industry experience and operational capability

• Track record in similar projects or sectors

• Financial standing and personal guarantees (if applicable)

• Governance structure and management depth

Strong sponsorship significantly enhances approval probability and pricing efficiency.

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2. Financial Performance & Cash Flow Sustainability

The core driver of credit approval is the ability to service debt sustainably.

Lenders review:

• Historical trading performance

• Profitability trends

• Cash flow generation

• Debt service coverage ratios (DSCR)

• Sensitivity to downturn scenarios

Projected financials must demonstrate realistic assumptions and resilience.

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3. Leverage & Capital Structure

Credit providers evaluate overall gearing and risk layering within the capital stack.

Assessment includes:

• Loan-to-Value (LTV) ratios

• Total leverage position

• Senior vs subordinated debt exposure

• Equity contribution and sponsor commitment

• Covenant headroom

Balanced capital structuring reduces risk and improves funding flexibility.

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4. Collateral & Security Position

Asset strength and liquidity are key risk mitigants.

Underwriting considerations include:

• Asset valuation and quality

• Market demand and liquidity

• Additional collateral or guarantees

• Legal enforceability of security

• Exit recoverability under downside scenarios

Higher-quality collateral often supports stronger leverage terms.

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5. Sector & Market Risk

Lenders assess sector stability and macroeconomic exposure.

Factors include:

• Industry cyclicality

• Regulatory environment

• Competitive landscape

• Geographic concentration

• Demand and supply dynamics

Sector resilience directly impacts pricing and structure.

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6. Cross-Border & Structural Complexity

For international or structured transactions, additional factors are evaluated:

• Multi-currency exposure

• Offshore holding structures

• OpCo / PropCo separation

• Tax and jurisdictional considerations

• Regulatory compliance across territories

Complex structures require disciplined alignment between legal, tax, and capital frameworks.

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7. Exit & Repayment Strategy

A clearly defined exit pathway is fundamental to credit approval.

Lenders evaluate:

• Cash flow amortisation capacity

• Refinance potential

• Asset sale liquidity

• Long-term sustainability

• Downside risk mitigation plan

A credible exit strategy enhances execution certainty.

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Conclusion

Credit approval is ultimately a structured risk assessment exercise. The stronger the alignment between borrower capability, financial resilience, asset quality, and capital structure, the higher the probability of favourable funding terms.

Understanding these criteria in advance enables proactive structuring, improved lender confidence, and more efficient transaction execution.

Corporate & Business Capital Documents & Information Guide

1. Borrower Information

KYC & Sponsor Profile

• Identification and address verification (Directors, Partners, Major Shareholders)

• Personal and professional profile, including sector experience

• Credit reports for all key stakeholders

• Background and track record summary

Borrowing Structure

• Full corporate structure chart (Personal / Partnership / Corporate)

• Details of Directors, Shareholders and Ultimate Beneficial Owners (UBOs)

• Registered addresses and jurisdiction details

• SPV structure (if applicable)

Anti-Money Laundering (AML) Documentation

• Asset & Liability statements

• Income & Expenditure statements

• Source of wealth and source of funds

• Equity / deposit proof

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2. Collateral & Asset Information

Asset Details

• Full asset description and location

• Brochure, legal pack and tenancy schedule (if applicable)

• Valuation report (if available)

• Details of existing charges or encumbrances

Operational Profile

If Owner-Operated Business:

• Operational structure and management details

• Past operating accounts

• Projected accounts and cash flow forecasts

• Expansion / refurbishment plans (if applicable)

If Investment / Rental Structure:

• Tenant or operator profile

• Management agreement (if applicable)

• Financial strength and experience of operator

• Lease terms, tenure, and break clauses

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3. Financial Information

• Last 2–3 years statutory accounts

• Latest management accounts

• Profit & Loss statements

• Balance sheet

• Cash flow forecasts

• Details of existing debt facilities

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4. Purpose of Finance

Clearly outline the intended purpose:

• Acquisition / Purchase

• Refinance

• Restructuring

• Investment

• Development / New Build

• Refurbishment

• Business expansion

• Working capital

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Business Plan Requirements

A structured business plan should include the following:

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Executive Summary (Current Position)

• Overview of the existing business

• Company background and history

• Market positioning and competitive landscape

• Management team and organisational structure

• Products and services overview

• Historical financial performance

• SWOT analysis

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Executive Summary (Proposed Finance)

Funding Requirement

• Purpose of finance

• Amount required

• Proposed term and repayment strategy

Financial Projections

• Projected Profit & Loss

• Cash flow forecast

• Business growth assumptions

Collateral & Security

• Proposed security structure

• Guarantor details (if applicable)

• SPV structure (for acquisition or expansion)

Risk Mitigation Strategy

• Downside risk assessment

• Contingency planning

• Projected SWOT analysis

Corporate & Business Capital – Frequently Asked Questions

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How much can we borrow?

There is no fixed upper limit. Funding capacity depends on business performance, cash flow sustainability, asset strength, leverage position, management experience, and overall transaction structure. Well-positioned businesses with strong fundamentals can secure high-leverage or fully structured solutions subject to underwriting.

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Can funding be arranged with an adverse credit history?

Yes. While credit quality influences pricing and structure, each case is assessed holistically. We evaluate business performance, security position, cash flow resilience, and recovery strategy before structuring appropriate funding solutions.

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Can you arrange multi-currency or cross-border facilities?

Yes. We structure facilities in major global currencies and support cross-border transactions, offshore holding structures, and international trade corridors, subject to regulatory and jurisdictional alignment.

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Can funding be secured for new developments or start-up operations?

Yes. Development finance and expansion capital can be structured for new premises, manufacturing facilities, and platform build-outs. Funding decisions are typically based on project feasibility, sponsor strength, security, and projected cash flow.

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Can finance be arranged without historical trading accounts?

In certain cases, yes. Where historical accounts are limited, lenders may assess asset backing, sponsor experience, business plan credibility, and projected financials to determine viability.

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How long does corporate funding take?

Timelines vary depending on complexity. Working capital and asset finance may complete within 1–3 weeks, while structured term loans or cross-border transactions typically require 4–8+ weeks subject to due diligence.

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What security is typically required?

Security may include property charges, debentures, asset charges, personal or corporate guarantees, or additional collateral depending on leverage and risk profile. Structures are tailored to balance risk mitigation and operational flexibility.

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What costs are involved?

Costs generally include interest margin, arrangement fees, valuation and legal fees, and commitment fees where applicable. Pricing reflects risk profile, structure complexity, sector exposure, and leverage levels.

Corporate & Business Capital – Terminology Guide

This needs to be educational, simple, and clean — avoiding heavy legal language while still sounding professional.

Below is a structured version suitable for accordion layout.

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Corporate & Business Capital Terminology Guide

Understanding key terminology helps businesses make informed funding decisions and communicate effectively with lenders and investors. Below are commonly used terms within corporate and business finance.

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Senior Debt

Primary secured loan facility forming the foundation of the capital structure, typically repaid before other funding layers.

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Revolving Credit Facility (RCF)

A flexible credit line that allows businesses to draw and repay funds as needed within an agreed limit.

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Mezzanine Finance

Subordinated funding positioned between senior debt and equity, usually carrying higher return expectations.

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Asset-Based Lending (ABL)

Funding secured against tangible assets such as property, stock, plant, machinery, or receivables.

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Invoice Factoring / Discounting

Financing against outstanding invoices to accelerate cash flow and improve liquidity.

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Loan-to-Value (LTV)

The ratio of the loan amount compared to the value of the underlying asset or security.

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Debt Service Coverage Ratio (DSCR)

A measure of a business’s ability to service debt from its operating cash flow.

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Covenant

Financial or operational conditions imposed by lenders to monitor risk throughout the loan term.

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OpCo / PropCo Structure

Separation of the operating business (OpCo) from the property-holding entity (PropCo) for risk management and structuring efficiency.

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Special Situations Finance

Bespoke funding solutions for complex, distressed, or transitional business scenarios.

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Letter of Credit (LC)

A banking instrument guaranteeing payment to a supplier in international trade transactions.

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Cross-Border Financing

Funding structured across multiple jurisdictions and currencies, subject to regulatory alignment.

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Ultimate Beneficial Owner (UBO)

The individual(s) who ultimately own or control a company or legal entity.

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Capital Stack

The layered structure of funding within a transaction, typically including senior debt, mezzanine, and equity.