What You Need to Know About Investment Banking

Published: 05th February 2010
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Roy Murad may be the senior partner for this expense banking firm, which has been within the business for 30 decades.

Each and every organization has capital requirements. At Link Resource Partners, we support our consumers get access for the capital they desire, we structure that capital to meet our clients' objectives and we lower the cost of capital.

Link Resource Partners specializes in aiding people to raise equity, senior debt, asset based debt or sub-debt. By utilizing our current market expertise and corporate finance expertise, we provide recommendations that address our clients' present requirements and acts because the basis for future growth. We consider all obtainable alternatives for the client, and advise the finest solution making use of our sophisticated treasury, finance expertise, and current market expertise.

By understanding the process and knowing how and when to deal with the operational, financial, and informational elements of a deal, you increase the likelihood of successfully closing a transaction.

Link Resource Partners is committed to implementing successful mergers and acquisitions for our customers. We have a considerable amount of experience in this segment as we perform a variety of M&A assignments, in addition to other expense banking services. Whether you are looking for help in identifying or approaching acquisition targets, financing an acquisition, or discreetly exiting a organization or division, we can provide the strategies and discipline required to meet your objectives.

We view an M&A assignment as one part of a client's overall growth strategy. We utilize our financing capabilities and capital industry insight to establish strong partnerships and integrated solutions for our clients.

Where to begin?

How much capital is required? Where will I get the capital? What are my alternatives? How can I finance this growth? The merger is appealing, but how can I provide the financing needed to execute the deal?

These are questions all entrepreneurs face. As business changes, you will face finance and capital related challenges. At Link Resource Partners, we know these issues are difficult to deal with, but crucial for your enterprise.

Challenges that we regularly address include:

Growth or seasonality pushed you out of covenant with your bank

At your credit limit and still require working capital

Global supply chain forced you to carry more inventory

Want to know how to take advantage of your payables

Faced with a once in a lifetime acquisition opportunity but do not have the necessary finances

Frustrated with banking covenants

Bulge facility is inadequate for organization seasonality

Temporary or project financing required

There are a number of alternatives on the market to solve each problem. The key to any problem is finding the optimal answer . This is where Link Resource Partners can provide you, our customers, with our value-added services. We do not just offer a solution; we deliver on the right answer to meet your specific requires

Define the objective

Know & evaluate the possibilities

Bank Lines

Secured Term Loans

Export Financing

Commercial Mortgages

Asset Dependent Loans

Accounts Receivable Insurance

Capital Leases

Equipment Sales & Lease Back

Construction Loans

Project Financing

Off-Balance Sheet Leases

Provide the Optimal Answer

We, at Link Resource Partners, offer our customers the optimal solution by implementing any from the above tools to meet the objective of delivering the lowest cost of capital with the ideal terms and conditions.

It is imperative that your corporate finance partner has a deep understanding and relevant experience in all within the above areas.

With Link Resource Partners' credibility and experience dealing with a complete spectrum of financial instruments, we are able to combine both conventional and innovative methods of finance towards creating the perfect answer for our individuals.

It is up to you to determine and realize the positive aspects, and it is up to us to minimize the total price of ownership. Total price of ownership includes not only rate or dilution, but all costs, both present and future, in obtaining the capital. It is obvious that evaluating a capital solution involves looking at the rate of return, however, to minimize the total cost of ownership requires experience from a broader perspective.

Is a money on the market?

First, we have more sources of capital. For example, few finance groups are equally adept at completing a private equity financing as they are renegotiating a senior bank line of credit. With our expertise, we are able to cover the large spectrum of financing techniques and products and, therefore, increase the availability of funds.

Second, we leverage more from each source. We achieve higher margins and valuations through the application of our experience and industry leverage.

Finally, we are able to support our people through the use of our own capital.

What financial instrument is most suitable?

Each financial instrument is designed for a specific purpose that has a defined target group and, as a result, operates under specific criteria. Whether or not the borrower or investor is sensitive to interest rates, advance rates, amortization periods or the term of a loan, the primary criterion that determines the cost of capital is the source's perception of risk.

Although ratio calculations, cash flow, debt service and profitability to a large degree influence the price of capital, other elements also play a significant part.

As part of any of our mandates, we assist our people to promote the strengths of their company and manage or bolster any areas of concern. Our ability to leverage our relationships, correctly analyze and package each deal and match them with lending ensures that our individuals obtain the most favorable lending terms.

Analyzing our client's balance sheet helps determine which borrowing instrument is most appropriate. Understanding which lender is active in a specific current market and the reasons behind it is critical when positioning a file. Although the marketplace is comprised of a variety of lenders and credit instruments, we structure all of our files to target the right lender. Our objective is to save time and money, but more importantly, to ensure that today's financing answer can act because the basis for our clients' future requires.

What does an optimal financial remedy mean?

It will be the very best balance of minimizing the cost of capital and at the same time, not creating unnecessary high levels of risk.

Many businesses immediately turn to equity investments when they need capital, usually with the belief that a debt answer is not available. Our strategic advantage is that we give our customers access to debt and equity markets. It is valuable to think of a debt solution as it avoids dilution equity and it can dramatically increase the client's returns.

For example, if your business wants access to additional working capital because of a seasonal trend and your bank will not provide a bulge, a short-term factoring answer, mezzanine or sub-debt might be a better remedy than switching banks or selling equity.

First, we identify the organization issues and, with the client, agree on a financing strategy. Second, we address the critical company issues and generate the requisite financial and organization information. Third, we go to your market and proactively work through the lending cycle.

Often transactions involve multiple creditors and, therefore, necessitate inter-creditor agreements. Our deals survive the legal process due to our thorough analysis right from the start. Delivering on everyone's expectations and protecting the client's greatest interests through this process requires deep experience and leadership on our behalf.

Does our relationship terminate after the transaction is complete?

Our involvement does not stop with funding as we see beyond the immediate transaction. With most customers, we evolve into an ongoing resource as a trusted source of capital advice and solutions. We aid our people maintain positive relationships with their lenders beyond closing the deal, and our lenders also view us as an important resource. It is not uncommon for a lender to seek out our assistance to address potential issues before they become problematic - assistance that is always forthcoming.

We are here to support our consumers, the lender, and the original deal beyond the initial agreement. We are able to build both comfort and confidence to investors and lenders when they are presented with Link Resource Partners' deals; this translates into better terms for our customers.

Our customers continually seek our service as they feel confident that we meet their financing needs as we act since the conduit to broader capital markets.

We provide valuable experience, expertise, and a number of resources to manage and deliver on the funding project. Our tenure, velocity of transactions, and marketplace exposure is second to none. Projects and transactions are managed via a team approach at Link Resource Partners with a single, senior representative managing the project who is responsible to client.

Since we take ownership of delivering your financing needs, we are often viewed as your company's financial arm and we take this responsibility very seriously.

Negotiating the terms of loan documents

Often, the terms and conditions of credit facilities are rigid. Depending on the deal and the lender, our goal is to negotiate terms that limit the number of financial covenants our consumers have to have to report on. It is not uncommon to negotiate as little as 1 or two financial covenants with our deals. We manage this by initially creating a competitive environment for the organization with potential lenders during the Discussion Paper stage so that no surprises arise when a Term Sheet and/or Commitment Letters are delivered.

With respect to personal guarantees, the size of a deal and the condition of a organization are the significant factors as to if a lender requests personals.

Due to lending specialization and risk appetite, we often parcel out a credit facility to different lenders. Conversely, we may suggest breaking up a credit facility to prevent 1 lender having leverage over all the assets on the business. A price and risk analysis is usually performed to determine the good manner in which to compartmentalize borrowing wants and simplify the process.

Since many for this financing assignments we work on involve arranging multiple credit facilities from multiple sources, we have the level of expertise required to navigate through this process. Our ability to act as the intermediary between lenders, and provide realistic selections early while in the process, prevents deals from breaking down when they are inside legal phase. The game plan that we choose at the beginning is clearly outlined for the lenders so that individual expectations are aligned with a master plan on how a deal will evolve.

Increasing Margin Availability and Improving Working Capital

If your provider is constantly at the edge of its line of credit's margining limit, we will review the existing facility for new people to determine if there is more room to squeeze out working capital. While most have set margining policies, there are methods to guide increase line availability that we can explore.

Balance Sheet Enhancement - Recapitalize and Restructure

Most companies routinely go through the process of re-capitalization and restructuring. Schedule "A" banks have well established lending criteria that can often act as barriers to entry for many individuals.

Each company owner wants to secure the cheapest financing on the market to it. If a company's debt to equity position is too high, or its recent ratio coverage is to low, a common approach for us is to provide a pure equity solution or a mezzanine solution through our BCC fund, tailored so that the money invested is treated similar to equity.

While this may have a slightly negative effect on the income statement, the advantages outweigh the disadvantages, and guide strengthen the financial position dictated by the balance sheet.

In conclusion, corporate finance is not an adjunct or bolt on professional service to your business; it is integral to your business. The business, its balance sheet, its income statement, its customers, and owner are dynamic to 1 another. We succeed in helping clients get more from the functional area of corporate finance not only because we are experienced in corporate finance, but because we are truly experts at understanding our client's business. Through our services, together, we get the most from the dynamic relationship between your business and corporate finance.

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