This is the hottest sector of the Invoice Discounting Market.
Lenders have realised that they can add value to a customers requirements by looking beyond just the debtor book.
By including a company's stock, plant and machinery and property they can provide a much bigger revolving line of credit and flexing the facility in this way advances up to 150% of debtors can be achieved.
This type of finance is particularly suited to: -
- Management Buy Outs /Buy Ins
- Re-finance of existing bank overdraft
- Turnaround Situations
By using Structured Finance, more funding can be released than by a conventional overdraft therefore there is less need to call on venture (or should that be vulture) capitalists for help. This ensures maximum retention of equity in the hands of management.
Typical advance levels are:-
- Debtors 90%
- Raw Materials 30%
- Finished Goods 60%
- Plant & Machinery 80%
- Property 60%
The starting level for Structured Finance is, typically, £1m with transactions over £100m not uncommon.
For larger deals (£5m plus) senior debt and mezzanine debt can also be provided.
Amongst the limited number of Structured Finance lenders who can provide these types of solutions, there is a keen appetite for this type of business and the costs are equally competitive.