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For companies and investors involved in an institutional buyout (IBO), invoice finance facilities, such as factoring and invoice discounting, are an ideal means of both funding the deal and boosting working capital post-completion.
Whilst this asset based lending is now considered an important cash flow solution for SMEs, it is rapidly becoming a front line form of finance for many institutional investors and their portfolio businesses.
As key players become aware of the range and sophistication of deals that Lloyds TSB Commercial Finance can support, we are being brought into the funding mix at an early stage in the transaction process.
Our facilities are increasingly being viewed as strategic tools which are particularly suited to being used by investors to leverage the volume of assets already owned by the target business such as sales ledgers, stock, property and machinery.
The flexibility of invoice finance, which includes factoring and invoice discounting, allows it to:
- Sit comfortably alongside debt and equity in a deal structure to bridge any funding gaps and ensure robust deals get over the line
- Ensure that the company has the working capital needed to effectively target new growth opportunities post completion
- Release the funds required to purchase target firms without adding additional debt to the balance sheet
Institutional investors are increasingly recognising that Lloyds TSB Commercial Finance’s funding packages are a robust method of financing a deal, as they ensure risks are shared and secured against real world, hard assets.
By providing facilities which can be scaled to match the changing requirements of the business they are well suited to implementing both value protection and enhancement strategies post-completion.
Because they can quickly leverage the existing assets in a company, it can be a valuable tool in generating working capital to tackle cash flow issues or release the funds needed to execute ‘buy and build’ acquisition strategies.
Contact us to find out more about how Lloyds TSB Commercial Finance’s flexible funding solutions can assist your investment strategy.
(Alternatively to find out how much you can raise by using our factoring and invoice discounting services, use our quote engine.)
The provision of credit or leasing services by us is subject to your meeting our Credit approval. Please ensure that you only apply for credit or leasing services that you can comfortably afford.