BDO advises both corporates and the public sector on all financing issues and supports them in finding and implementing optimal financing solutions. Our team of experts with interdisciplinary expertise provide you with comprehensive support until your specific financing goals are achieved.
Our consulting services
We can support corporates and investors (including family businesses, start-ups, SPVs) on financings relating to many different situations - e.g. new investments and acquisitions, in connection with the prolongation or rescheduling of existing loans as well as in the financing of corporate actions. We are also an established partner when our clients find themselves in a less positive phase of their development e.g. in the event of impending loan covenant breaches, or who are faced with a restructuring or in the context of applications for subsidies in connection with COVID 19 aid, where we are currently very active. We can help our clients to maximise their debt funding options, improve their liquidity and optimize the liability side of the balance sheet.
We also advise public-law entities (including the German federal government, the German states, local authorities, pension funds and other public-law institutions) in connection with the structuring of specific public sector financing issues. This includes for example equity investments, procurements and other investment matters as well as guarantees. It also extends to advising the public sector in connection with the granting of COVID-19 subsidies from stabilization funds, where again we are currently very active.
In practice, our range of services regularly includes:
- Carrying out risk and financial analyses
- Preparation or analysis of liquidity planning and implementation of financing strategies (also in crisis situations)
- Preparation of key financial figures for internal monitoring and external communication (e.g. information memorandum, teaser or reporting to stakeholders)
- Calculation of refinancing costs
- Identification, approach, negotiation and contract drafting with capital providers
- Identification of funding programs, application for funding, support up to notification of grant including subsequent usage checks
- Assumption of trustee functions in complex financing processes and stabilization measures
Our added value for you
We at BDO take a holistic approach to your corporate or investment strategy, analyze your existing financing structure and validate the specific financing requirements. We advise you on the selection of suitable financing components and then support you in the implementation of the process.
Our broad market knowledge as well as our diversified industry know-how enables us to select the most suitable financing solutions for you - including alternative or innovative forms of financing – which can also help you to minimize your financing costs.
Various financing options may be available to implement a finance strategy. In practice, the following equity and debt instruments are often very relevant:
In the event of a capital increase, a company issues new shares and receives financing from the new shareholders in return (to be paid as contributions to equity). Under company law, this is done by increasing the share capital (GmbH) or capital stock (AG).
Private equity capital means a pre- or off-market entrepreneurial investment on a corporate law basis and is an equity instrument. Private equity providers are usually organized in the form of funds that serve as intermediaries between the actual capital investors (investors) and the company to be financed.
Making use of available public subsidies is an aspect of corporate financing that should not be neglected, especially for small and medium-sized enterprises (SMEs). Public funding is provided in the form of non-repayable grants, loans at preferential terms, or real or quasi-equity investments.
Bank loans/(private) lenders
Bank loans are still the principal financing instrument in Germany (especially for owner-managed companies). In addition to banks, institutional and private investors are other potential lenders.
Bonds are debt securities issued by a company to third parties for financing purposes in return for the transfer of a capital sum. Under the terms of the bond, the issuing company owes repayment of the principal amount at the end of the term and usually also interest payments during the term.
Promissory note loans (Schuldschein)
A promissory note loan is a loan similar to a bond (promissory bill as evidence document).
Mezzanine financing occupies a position between equity and debt capital and can be found in various forms:
Mezzanine loans (subordinated loans, participating loans)
Mezzanine loans are loans whose structure gives them a hybrid character between equity and debt. The most important forms are subordinated loans and participating loans.
- In the case of a subordinated loan, the lender is subordinated to the claims of other creditors on the basis of a contractual agreement with regard to its repayment claims.
- Participating loans, on the other hand, are loan agreements with atypical remuneration arrangements. Instead of the usual fixed interest rate, variable remuneration is granted based on the company's performance.
Capital combined with profit participation rights (Genussrechte)
Profit participation rights are purely debt-based investments in companies. They grant the investor rights that are typically only available to shareholders.
Convertible bonds and bonds with warrants
Convertible bonds and bonds with warrants are securities which, in addition to granting an entitlement to interest and repayment, also certify the right to become shareholders of the issuing company under specified conditions.
Alternative forms of financing include for example leasing and factoring.
BDO’s team of experts
In our multidisciplinary debt advisory expert team, we have extensive experience in the entire financing process, from the initial financial analysis of your requirements to the development of a tailored financial strategy through to the implementation of the chosen financing strategy. Your BDO team is made up of experienced specialists who regularly advise on financing processes for investors and companies in a wide range of industries as well as public entities. Our approach is informed by our commercial know-how combined with financing, audit and tax expertise as well as legal provided by our cooperation partner BDO Legal Rechtsanwaltsgesellschaft mbH.