Investment financing: Tailor-made growth capital
Investing is essential for future-proofing your business, whether it involves new production lines, digitalization, or sustainable innovations. At the same time, the wrong financing choice can strain your liquidity: think of repayment peaks, unexpected interest rate hikes, or a term that doesn't align with the lifespan of your investment. From unrealistic credit needs to suboptimal financing options: these pitfalls can not only disrupt your cash flow but also delay your growth plans.
At Match Plan, we've been supporting managing directors in small and family businesses for over 30 years in finding the optimal mix of equity, debt, and risk-bearing capital. Our structured approach, from calculating your total credit needs to selecting the right form of financing From preparing your financing application and negotiations, we ensure you go through every step with confidence and your growth plan remains affordable.
Why continue investing in your business?
Investing isn't just a one-time step, but an ongoing process that enables your company to grow, adapt to changing market conditions, and seize new opportunities. By continuing to invest in people, processes, and technologies, you strengthen your competitive position and lay a solid foundation for sustainable business growth.
1. Market dynamics and competition
Markets are constantly changing due to technological innovations, new entrants, and shifting customer needs. Without regular investments in product development, digitalization, or infrastructure, your organization risks falling behind. By investing, you anticipate market developments and stay ahead of your competitors. This not only boosts your current market share but also creates a competitive advantage that attracts new customers.
2. Transition to the next business phase
Each phase in a company's lifecycle presents unique challenges and growth opportunities. From startup to scale-up, and ultimately to a mature organization, each step requires new capabilities, such as a large team, advanced processes, or international expansion. By investing specifically in personnel, management systems, and capital, you lay the foundation for the next growth phase. This ensures a smooth transition and prevents growing pains that could jeopardize your continuity.
The biggest bottlenecks in investment financing
When financing your investments, you'll encounter various financing challenges that can delay or increase the cost of your growth plans. Understanding these challenges will help you make the right choices and avoid unpleasant surprises.
Choosing a suitable financing option
: The offerings range from long-term loans and lease arrangements to innovation credits and mezzanine financing. Without a thorough comparison of terms and costs, you run the risk that your financing won't align with the investment's purpose.
Term, repayment and interest
: A mismatch between the term of the financing and the economic life of your assets causes unnecessary repayment obligations and interest rate spikes. This puts pressure on your liquidity position and can lead to additional sureties or guarantees.
Equity vs. debt vs. risk-bearing capital
: The composition of your capital structure determines both your financing costs and your degree of flexibility. Too much debt increases your interest expense, while only equity Growth opportunities can be limited. A balanced mix optimizes your costs and risks.
Which financing option suits your investment?
The choice of financing depends heavily on the type of investment and your liquidity position. A mismatch in terms, repayment obligations, or risk capital can put pressure on your cash flow. Therefore, a clear understanding of the options and conditions is crucial.
1. Financing of tangible fixed assets
Machinery, commercial buildings, and vehicles have a long economic lifespan and place a significant burden on your liquidity. With a long-term loan, you align the term with the lifespan of the assets, ensuring your monthly expenses remain in line with your returns. This form of financing for tangible fixed assets prevents high repayment peaks and guarantees a stable cash flow.
2. Flexible leasing structures
Sale and leaseback
: You sell your asset to a financier and then lease it back. This frees up capital without any assets on your balance sheet, creating room for investment.
Vendor lease
: The supplier offers equipment through a leasing company for installment payments. You benefit from installment payments and maintain access to modern equipment without significant initial outlay.
3. Innovation credit for R&D projects
Applying for the Innovation Credit is ideal for companies with costly development projects and technical risks. This risk-bearing loan covers part of the costs of new products, processes, or services. In the event of an unexpectedly failed development, the repayment obligation is waived, giving your R&D financing a solid foundation without unnecessary risks.
How to prepare your financing application
A successful financing application requires a structured approach and careful preparation. The step-by-step plan below will help you clearly identify your needs and increase your chances of success.
Step 1: Determine the total credit requirement
First, carefully map out the investments you want to make and the associated costs. Make an overview of purchase prices, installation costs, and any additional expenses. This will prevent you from having to adjust your financing application once it's submitted to the lender.
Step 2: Create a solid business plan
Develop your plans in a clear business plan describing the market, your positioning, and your expected cash flow. A compelling business plan demonstrates your vision for the future and supports your application to banks or investors.
Step 3: Compare financing providers
Identify the various financiers: banks, leasing companies, investment funds, and government loans such as the Innovation Credit. Compare not only interest rates, but also terms, repayment schedules, and collateral.
Step 4: Negotiate terms
After selecting one or more lenders, you'll negotiate the interest rate, fixed-rate periods, penalty clauses, and collateral. A small adjustment to the terms and conditions can significantly reduce your financing costs.
Step 5: Finalize and monitor your financing
Once the financing terms are finalized, you sign the agreement and the credit is released. Continue to closely monitor your cash flow forecasts and repayments to make timely adjustments and avoid unnecessary financial risks.
What does your financier look at when providing financing?
The applicant
: Borrowers, guarantors, and sureties determine who is legally responsible for repayment. Banks want to exclude private exposure to clearly define the risk profile.
The revenue model
: How does your company earn money, and how sustainable is that model in changing markets? This analysis forms the core of the credit assessment.
Quality of management
: Banks assess whether your team has the right experience, vision, and structure to implement strategies and manage risks.
The credit demand
: A clear explanation of the loan's purpose and the associated cash flow impact will show whether the financing fits within your business operations.
Financial situation
: Profit and loss accounts, cash flow forecasts, and balance sheet ratios (debt to equity, current ratio) demonstrate your company's ability to meet future costs.
Guarantees
: Collateral such as real estate, inventory, or machinery reduces financing risk. The stronger the collateral, the more favorable terms you can negotiate.
Why choose Match Plan?
At Match Plan, we understand the complexities of applying for financing and guide entrepreneurs through every step of the process. Our business financing experts can help with:
- Conducting a thorough search for the financier that perfectly matches your credit needs and risk profile.
- Drawing up a sound financing plan and a convincing pitch for your application.
- Negotiating with financiers to achieve the most favorable terms.
Do you need financing for your investments? Contact us for Match Plan financing advice, or find out how we can help you with a business takeover, business valuation or the sale of your company.
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