Private Finance
In Private Finance, For CompaniesAbout BMS Finance in relation to private finance
Most people are familiar with ‘public finance’ securities such as bonds. Private financing typically occurs when a company needs to borrow, but is either unable or reluctant to source financing from a bank, and does not have the infrastructure, the credit rating or the inclination to approach the public market. The borrower may need funds to finance its business inventory, or may have a temporary or seasonal need for cash while awaiting payment for goods/services already delivered. In the private finance arena, those who understand the prevailing business and legal environment, can offer funds to a borrower with collateral or asset-backing. Typical collateral includes inventory (e.g. stock, equipment), real estate, accounts receivable, contract receivables and the intrinsic value of the company.
Rather than having a ‘one-size-fits-all’ approach, BMS Finance adds value by designing the right funding package for each client’s particular needs, in the form of long term contract receivables financing, venture leases, invoice discounting and amortising loan facilities. Whilst a business in any sector is considered for suitability, particular focus is given to the following: business services, financial services, IT and technology, media and entertainment.
Our clients
In general, our clients have reached a stage where further working capital is required to underpin growth. Having secured initial equity finance through one, or a number of, venture capital firms, our clients are looking for a more affordable solution to fund the next stage of their growth. Rather than seeking additional equity, clients require funding structured to exploit the unrealised value in assets, tangible or intangible, such as contracted revenues and other financial receivables, which minimises the dilution effect on existing shareholders.
Approach – intangible assets
The relationship with each new client begins by identifying not only the obvious assets within the company, but also the ‘hidden’ ones - in today’s economy, intangible assets are every bit as valuable as ‘old world’ hard assets. Thorough analysis of these assets enables BMS Finance to determine the value that can be created by releasing them for finance.
It is important to find the right balance between the client’s ability to repay and BMS Finance’s security and returns requirement. Once a suitable structure has been agreed and documentation executed, regular monitoring begins through monthly meetings. This process ensures that BMS Finance remains aware of client developments and is better positioned to assist with future funding requirements. Experience has shown that putting in place at the outset a structure that works for both the client and BMS Finance enables the solution to develop and mature in line with company growth.
Sources of funds
BMS Finance acts as an advisor to the ARCH BMS Finance Fund. The Fund engages in lending through secured loans (bridge and term), factoring, discounted securities and leasing. Throughout the process it is in everyone’s best interest to ensure that stringent risk management measures are taken, by conducting rigorous cash flow and collateral monitoring.
Skills
The backgrounds of the principals of BMS Finance combine years of operational expertise with specific corporate finance knowledge. Having this breadth of experience enables BMS Finance to understand companies’ operations and financing requirements in depth, and also provides the firm with the ability to design the most beneficial structure for clients whilst maintaining appropriate security and returns.