16/01/2012

Structure your growth investment for long-term success

Funding your long-term growth plans with a well-structured mezzanine or quasi-equity funding package can offer some significant benefits and underpin your future success.

“Funding your long-term growth plans with traditional debt isn’t always the right option. Even the best business plan can be thwarted by an unsuitable funding package,” explains new investments manager, Mike Owen. “Turning your growth plans into reality needs careful thought to secure the investment you need and often the way it’s structured can also be crucial. This is where mezzanine can come into its own.”

Focus on creating real business value

Matching your business plan with the right funding package from the start means you can concentrate on building a sustainable and successful business.

We’re an experienced SME investor, so we don’t just think about available security. We can structure our investment creatively and consider your ability to service any repayments based on your growth forecasts. Flexibility really is the key.

Mike OwenFinance Wales' new investments manager

A mezzanine structure can free-up much-needed capital to help you achieve your forecast growth plans.

“A sensible ‘stepped’ repayment profile or repayment holiday could be the answer. Alternatively, we could ‘roll up’ an element of the interest costs in the early days. In certain cases we could offer you a profit sharing arrangement where our return would be based on how our investment has contributed to your growth,” Owen explains.

Take the long view

For many businesses, one funding round isn’t always enough, so a number of properly structured investment rounds from a supportive long-term investor can make a major contribution to your future success.

“Above all, it’s important to be realistic about the funding levels you need and how long it will take you to achieve your plans. This should influence the type of investment structure you choose,”  Owen concludes.