The Evolution of Debt – What is Right for my Company?

One of the fabulous developments from the banking crisis has been the growth in the number of alternative funding options that have become increasingly visible in the Northern Ireland market place.

Traditional senior debt providers now fund to levels expected for secured lenders. Variances between institutions can be around pricing, fees, covenants, term, structure and good old relationships.

Local banks are prepared to partner with asset based lenders such as Upstream, Close Brothers, Bibby, unsecured cash flow lenders such as Whiterock or with Private equity funds like BGF, YFM, Clarendon Fund Managers, HG Capital, Broadlake, MML etc who have all invested in Northern Ireland companies in recent years.

Increasingly we are seeing other debt funders invest time or people in Northern Ireland. Atom Bank is an exciting new entrant. While Ortus and Assetz have been reinvigorating for the Real Estate sector. Mezzanine funders, unitranche funds and family office debt funds are now exploring opportunities in NI.

Before making a decision on what financial instrument your company needs, shareholders need to consider inter alia:

  • 1. What is the growth strategy of the business?
  • 2. What capital investment requirements, working capital requirements, R&D requirements or acquisitions could form part of this strategy?
  • 3. What is the right funding structure to match the strategic plan?
  • 4. What does the business need to do to secure the best funding partner?
  • 5. What level of control are the shareholders happy to give away?
  • 6. Could certain debt instruments be prohibitive to growth?

Our team in HNH combines experience in lead advisory, due diligence, private equity and banking.

wayne horwood HNH Group BelfastGiven the evolution of the funding market and burgeoning range of options available to companies, we have sought to further strengthen our team, bringing in Fiona King, an experienced senior banker, to focus on Debt Advisory and M&A and Paul Gleghorne to bolster our Financial Modelling team.

We would be delighted to hear from any companies that are considering a funding round and would value an independent, expert analysis of the various options open to them.