Over the years, lending remains one of the fastest and most affordable ways to implement large capital-intensive projects, finance current expenses and pay off previous debts. The latter reason has led to the growth of corporate refinancing for large businesses around the world, especially during period of prolonged crisis and market uncertainty. The term “refinancing” is also used in the meaning of loan rollover.
As a rule, this process is carried out by issuing a new loan instead of the previous one or by exchanging old bonds for new ones.
Refinancing is mainly to improve the terms of the loan (maturity, payment schedule, interest rate), as well as to combine several debt obligations into one more acceptable loan for business.
While refinancing may seem like an easy way to get more money, it can turn out to be disadvantageous for borrowers. We recommend that you carefully study the proposed terms in order to assess the real value of money and understand the potential risks of a new agreement.
Viola Funding Limited provides corporate refinancing for large companies and long-term loans in the field of energy, heavy industry etc.
We are also specialized in financial services for large businesses, project finance services (PF), long-term loans and full financial support for projects in the field of energy, infrastructure, heavy industry, oil and gas, waste processing, agriculture, real estate and tourism.
Corporate refinancing for businesses: Most reasons
Decision may be forced, taken by the company’s management against the background of objective problems of an internal or external nature that negatively affect the performance of the business.
The decision to refinance a previous loan can be made not only in the context of improving conditions in the financial market and the emergence of more attractive financial products.
Most reasons for refinancing businesses can be as follows:
• Insufficient initial investment, which requires additional funding for the successful implementation of ongoing projects. This situation may arise due to the mistakes of the borrower’s financial team at the investment planning stage or in the event of negative factors of force majeure, as well as in case of unfavorable market changes.
• Low efficiency of management decisions. Management problems can arise as a result of abrupt changes in the management of the company, changes in the structure of the business or the transfer of the company to new owners. Wrong decisions related to large investments, entering new markets or other capital intensive projects can affect the borrower’s ability to service debt.
• Litigation, especially claims of others against the borrowing company, which may result in the disposal of significant amounts of money or valuable assets. This is a serious threat to the company’s solvency and may require urgent measures to restructure or refinance existing debt, taking into account the consequences of litigation.
Problems with servicing loans can arise for many reasons, which are associated with the lending process, changing market conditions, the general economic downturn, inadequate company management, force majeure and many other nuances of commercial activity.
The role of refinancing in the implementation of long-term investment projects
In project finance schemes, the risk of early repayment of a loan is a typical risk borne by banks. If the same lenders finance the construction and operation phases, they bear the risk of early repayment of the entire loan by the SPV.
Banks usually provide for early repayment of loan payments with an additional fee. To avoid the described situation, financing of individual phases of construction under the PF is organized independently. Different syndicates can be the source of financing for the construction of the project and the operation.
Additionally, in order to motivate participants to arrange for further financing, the interest rate on the loan increases over time. However, more often than not, all financing is provided by one group of lenders, which provides higher financial flexibility and allows better risk management of the project, involving banks in accepting and minimizing risks.
Business refinancing security tools
Securitization is a refinancing instrument, in which a portfolio of assets is formed, and liquid securities (stocks or bonds) are issued against them. These securities are offered for purchase by the investment community.
The funds received from the sale of these securities are used to pay off debt obligations to the initiator of the program. In this way, the initiator company indirectly attracts the required funding.
Types and stages of securitization
The conditions of the corporate refinancing program are always adapted to the individual needs of the participants in this process and the specifics of the securitized assets.
The advantages of securitization obviously include a reduction in the cost of raising capital compared to traditional bank credit financing, diversification of funding sources, an improvement in the company’s image and preservation of the credit rating.
However, recruiting experienced consultants is key to the success of enterprise refinancing. Only a professional financial team can organize securitization in the most efficient way, avoiding common mistakes and miscalculations.
Corporate refinancing for businesses: our services for large companies
Viola Funding Limited offers business loan refinancing. We are ready to develop an optimal scheme for refinancing investment loans intended for the purchase of land, construction and modernization of large facilities, as well as for the repair or renovation of fixed assets.
We offer the below;
•Long term and flexible payment schedule.
•Corporate refinancing of both operating and under construction enterprises.
•Loans in euros or other currencies at the request of the client.
•The maximum amount of financing is up to 90% of the investment cost.
Our experienced finance team can help you turn a burdensome loan into a flexible source of finance tailored to the needs of your business at any stage of development. We will negotiate corporate refinancing on the most favorable terms so that loan payments match the cash flows of your investment project.
If you are interested in loan refinancing or other financial services, please contact Viola Funding Limited
We mainly work with large loans of 10 million euros or more.
Contact us now to find out more.
eMAIL:[email protected]
Website:https://viola-funding.com/