About our corporate finance focus
We are a full-service intermediary. Not only for sellers of real estate for businesses and institutions and buyers c.q. investors, but also for capital seekers and capital providers. We, TNG Corporate Finance, act as an intermediary for corporations that need capital. For most businesses, debt and equity financing are the main sources of capital. Both are external to the business itself. The money comes from banks or bond issues, equity participation of investors, venture capital funds or other non-bank sources of capital.
How to get funding for your business case?
When looking for funding, your first investor should be yourself – either with your own (capital) risk. It is also important that you are able and willing to pay upfront costs that have to be made to qualify your business case for funding. This proves to capital providers that you have a long term commitment to your business case and that you – as an entrepreneur – are ready to take risks. 100% funding without any form of security is in the corporate finance world usually like a fairy tale: too good to be true. Sir Richard Branson, the highly experienced business magnate and well-known investor, also noted in this context: “Entrepreneurship in its very essence is all about taking risks. Stop playing it safe.”
About the need for own assets and a collateral
Depending on the business case, capital seekers may usually get business funding between 50% to 80%. A higher percentage up to 100% is possible in exceptional cases, but never without own assets from the capital seeker, or the provision of any form of security, a collateral, for example. In many countries, a director of a corporation is fully liable if financing has been provided that involves a substantial amount, without any form of security for repayment. An asset is any resource owned by the capital seeker. Simply stated, assets represent value of ownership that can be converted into cash (although cash itself is also considered an asset). And a collateral is an asset that a capital provider accepts as a security for the debt payments, the capital provider can seize the collateral and resell it to recoup the losses.
Required own cash from capital seeker
Depending on the capital provider and the nature of the business case to be funded, your own cash must always be at least € 50.000, also in order to be able to pay financing costs for professionals to be consulted and for (preliminary) due diligence in advance. Without any own resources it is hardly possible to obtain funding. The period of a funding agreement usually varies from 5 to 15 years. Sometimes a longer time span is possible. Non-bank capital providers often offer a combination of debt and equity. Sometimes there may be either debt or equity only.
Differences between banking and non bank capital providers
Please note that non-bank capital providers in the private secondary market are by no means comparable to banks and related financial institutions. All non-bank capital providers use their own terms, conditions and procedures. On the basis of the business case presented, most non-bank capital providers also provide customized solutions. Last but not least, many non-bank capital providers do not have a rating, their funding structures are sometimes complex and often unknown to the general public. Documents have no standards and there is a lesser degree of transparency due to the non-public nature. Obviously, non-bank capital providers cannot offer guarantees, such as banks and related financial institutions can give. This does not alter the fact that there are enough successful transactions in the private secondary market.
Seven steps to get funding
1. First, to assess whether funding is possible, we need at least the completely filled-out inquiry form for funding. We will send our requiry form upon request. Please send your request to: firstname.lastname@example.org.
2. Second, when we estimate funding options, we will send you our NDNCA to protect mutual interests.
3. Third, upon receipt of the completed and signed NDNCA, we will start our search for banking and/or non-bank funding possibilities. But only if you are willing and able to pay retainers, successes, and ancillary expenses.
4. Fourth, after our search we will provide you our Letter of Engagement (LOE) with information about our terms, conditions and procedure for matching you with a capital provider or his authorized representative.
5. Fifth, after signing the LOE, we charge you an upfront fee for our services as agreed in the LOE. Our work consists of compliance and making your file funding worthy. With a capital provider you only get one change. We usually spend 20 to 40 hours on this, but in some cases our necessary work can also be more than 40 hours. It mainly depends on the quality of the documents and information made available.
6. Sixth, after our work has been completed, we will make your file available to the aforementioned capital provider. Then we will guide you in your funding request to obtain a term sheet or similar document.
7. Seventh, once you and the other parties involved reach an agreement on the details laid out in the Term Sheet or similar document, a binding agreement is usually draw up by a legal professional. We guide you trough this process up to and including the payment(s) of the funding. Never before has the payment of the agreed success fee been due.
For any inquiries, please don’t hesitate to contact us.