More and more companies are struggling with their own financing. Financial support through debt capital, ie general capital raising, is a major challenge in corporate financing. It can quickly become a liquidity bottleneck. The consequences can be the reorganization of the company or the financing of growth.
Here, liquidity is crucial for a company. Without corporate financing, no liquidity can be generated for companies. Debt financing is therefore almost indispensable for a company. But expansion banks do not always play a part in corporate financing. However, corporate financing does not only include the liquidity of a company, it is the goal! The question arises about the means of corporate finance and how easy it is to obtain liquidity for companies.
Reorganization of companies – corporate financing through financial injection
When the bankruptcy vulture circles over a larger company, you even hear about it in the daily press. Politicians also speak of possible renovations and the hoped-for financial injection. This problem is often homemade. Insufficient company financing leads to a liquidity bottleneck. The company relies on a loan. However, if the corporate financing is unsuccessful and the required injection of funds is rejected by the bank, the company can quickly be restructured. To reorganize the company, you need one thing: money – and where do you get it from if the bank has already refused to finance the company? Refurbishing a company is not an easy task. And even if successful, crisis management must continue. In turn, borrowing in some form is required for the renovation. Corporate finance in the event of acrisis and raising capital when reorganizing a company is a tedious and difficult undertaking that you should seek advice from professionals.
Growth finance – corporate finance, alternative to development bank
But it is not only when a company is restructured that corporate financing through a financial injection is difficult. Companies also find it difficult to finance growth, for example, because a development bank, ie a promotional bank, cannot be found or the development bank does not keep up with growth financing. The company also needs liquidity in the form of outside capital for this type of corporate financing.
Since the liquidity of small and medium-sized companies is often not sufficient to finance growth, a financial injection from a development bank is required. It often fails because the development bank sees too great a risk in financing the company’s liquidity through external financing. Financing for growth would be an important part of corporate finance for a company. Nevertheless, the build-up banks are at a cross. How should you proceed with growth financing? With growth financing in particular, one should look around for alternative company financing in order to improve the company’s liquidity.