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Securing financing post credit crunch

Securing financing post credit crunch. July 2012. The credit crunch has transformed the landscape…. UK banks receive £37bn bail-out. Irish bank [Anglo Irish Bank] set to be nationalised. Government to provide €3.5bn each for AIB and Bank of Ireland. Iceland banks failed. Irish banks failed.

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Securing financing post credit crunch

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  1. Securing financing post credit crunch • July 2012

  2. The credit crunch has transformed the landscape… UK banks receive £37bn bail-out Irish bank [Anglo Irish Bank] set to be nationalised Government to provide €3.5bn each for AIB and Bank of Ireland Iceland banks failed Irish banks failed UK banks failed Iceland struggles for control as third bank is nationalised The Times, 10 October 2008 Iceland takes over Glitnir Bank 16 January 2009 bbc.co.uk, 13 October 2008 RTE, 11 February 2009 Global Banking News, 9 October 2008 There has been a fundamental reduction in bank capacity before lending ‘appetite’ and the current Eurozone crisis is even considered

  3. …and there’s more good news on the way! Estimated European Leveraged Loan Maturity profile Loan pricing High yield bond issuance Why is this relevant to West Midlands businesses?

  4. The range of funding sources is increasing HY Bond Market Sovereign Wealth Funds Hedge funds Private placements Private equity Mezzanine funds Insurance/Pension funds Credit funds Size of requirement Clearing banks Family offices Retail bonds Asset backed lending Venture capital High Net Worth Individuals Liquidity is still there – it just isn’t where it used to be! Development capital Grants Maturity of company

  5. The State is looking to facilitate increased lending Existing options Not yet launched Enterprise Finance Guarantee Business Angel Co-Investment Scheme National Loan Guarantee Scheme Project Merlin Enterprise Capital Funds Seed Enterprise Investment Scheme Business Growth Fund Business Finance Partnership Bank of England launches lending stimulus 15 June 2012

  6. The steps to secure funding CORPORATE STRATEGY FUNDING STRUCTURE OPTIONS WHY YOU?! PREPARE! PREPARE! PREPARE!

  7. Successful refinancing of your business Maximise your planning time Strategy assessment Preparation of proposition Engagement with funders Refinance completion T-12 to T-6 months T-6 to T-3 months T-3 to T0 months

  8. Note PowerPoint 2007 has a problem with indentation in text tables and text boxes. Once text has been deleted from the cell the formatting of the bullets is also removed. To fix this you will need to use the format painter to copy the formats of each level (line by line) from the panel below: Credit is scarce – how can you and your business stand out? What is the current ‘bar’? Evidence sources • Coherent and clear growth strategy • Proven track record • Management – incentivised and capable viz-a-viz ‘growth and shocks’ • High quality financial information • Risk awareness • Detailed scenario planning • Articulation of business strategy; • Clear explanation of the business and its key drivers; • Approach to mitigating risks; • Robust forecasts; • Rationale for financing requirement; • External validation eg asset valuations, due diligence

  9. David Reitman Partner, Debt Advisory Tel: +44 (0) 20 7694 3113 david.reitman@kpmg.co.uk Speaker

  10. © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. • The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International.

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