Key insights about SME financing parameters in a Trends Family Business article

During a company’s lifetime, several financing needs might occur in order to seize investment opportunities. Financing is thus essential to a company’s strategy, in particular for SMEs and family businesses. Indeed, the smaller the business, the higher the impact of each investment project. SMEs and family businesses therefore need to carefully design the financing structure of each investment opportunity they face.

At first, financing advisory expert Eric Bastin (BDO Corporate Finance), together with Evelyne Heyvaert (ING), reminds us of three key principles of a sound financing strategy. Furthermore, they present the different sources of funding, which are divided into three categories: equity, quasi-equity and bank credits. Note that the main quasi-equity products refer to subordinated loans, convertible and non-convertible bonds, mezzanine loans, participating loans and shareholders’ current accounts. Finally, the article also covers key concepts such as “smart money”, “crowdlending” and “buy-out” (MBO, MBI and LBO), providing a 360° overview of possible funding sources.

In order to practically illustrate each funding category, the article also includes three case studies.

The full article can be found online on the Trends Family Business website.

For more information, please contact Jan Vandommele