Recent conversations with informed clients and intermediaries alike have highlighted that the impact of Covid-19 has materially altered both the ‘thinking about’ and the ‘approach to’ raising debt capital.
What may have formerly been a straightforward affair with known opportunities, returns, risks and constraints has at the very least become a lot more involved and potentially impossible to complete in a reasonable period of time – within the mindset of a lender or debt provider.
Before you think though that you have to head off into equity territory, it is worth reflecting on what your known controllable items are and what data, history and facts you have at your disposal to justify a discussion with a lender.
Many a valid proposition has recently failed at the first step; not because it was not worth lending to, but because the approach was poorly thought out and/or the target of the approach being insufficiently understood. In short, a 2018 approach was being used for a 2020 environment.
In the current market, well informed borrowers have taken the time to understand what lenders want, what they need and how their risk appetites have changed.
Lenders that have capital to deploy in what is now a likely much longer duration low-yield environment have taken a positive shine to those borrowers who have actively managed and reformulated their business models to suit both the environment and preserve as much as possible their overall credit profile.
Demonstrating that you understand the target lender’s objectives and portfolio strategy ensures that the initial reception will be one of interest and stimulate a desire to learn more about the borrower or the new lending opportunity in a post-Covid world.
Vixory Capital ensures that it maintains a running account of lenders and their appetite for specific exposures and industry types, meaning that when you engage with Vixory Capital you know that you are maximising your chances of borrowing success.