What are reasons for lending or not? And what are criteria for selecting a financing adviser?
Reasons for granting or refusing credit
Not unexpectedly, financing applications from fast growers, profitable companies and above-average solvent companies are relatively successful. As the most frequently cited reason for rejecting all or part of a financing application, the monitor cites excessive risk and unfavourable capital structure (solvency). Some of the refinanced companies are able to reduce their interest costs. However, this is offset by other financing costs and tighter conditions, securities or other collateral.
Expected financing requirement
In the near future, 22% of small businesses (10 - 49 employees) and 28% of medium-sized businesses (50 - 249 employees) expect a financing need. This need arises mainly from wanting to maintain working capital, investments in operating assets and other fixed assets. Here, in 83% of cases - in the orientation phase - attracting additional loan capital plays an important role. This is an increase compared to previous years and is mainly prompted by the wider range of forms of financing (such as leasing and crowdfunding) and the quest for greater autonomy.
Finance consultant rated 7.7
What is further noteworthy is that 33% of the companies orienting to apply for financing have been assisted by a business advisor or financing consultant. They rate this advice with a 7.7. In comparison, 43% of the companies get advice from its house bank, which advice is rated a meagre 6.6.
Criteria for selecting financing adviser
Do you need or want to apply for funding? Below is a list of criteria a specialist business advisor should meet as a minimum:
- Provides independent advice and is not affiliated with the sale of any product;
- Don't talk down to you, but dare to express a dissenting opinion (unsolicited);
- Can outline new trends and solutions in the funding landscape;
- Has at least 10,000 hours of professional consulting experience and evaluates with you;
- Has an individual outcome objective, e.g. a quantified cost saving or intended overall solution to a funding issue.
