Find your situation
Five situations, and what each one turns on
Select the one closest to your requirement. Each shows what a lender will test first, what has to be prepared before the transaction goes out, and the work KentRidge performs.
Refinancing
An existing facility is maturing, has been reduced, or carries terms that no longer fit the business. Often it is a short-dated line funding a longer-dated asset. Frequently the cleanest transaction available to a good company with the wrong liabilities.
- What we examine first
- Why the incumbent lender is exiting or reducing, and whether that reason follows the company to the next lender. Whether the cash generation that serviced the existing facility is intact.
- What has to be prepared
- A reconciled debt schedule, the security position of the outgoing lender and the mechanics of its release, and a credit narrative that addresses the exit directly rather than leaving a lender to infer it.
- What KentRidge does
- Sizes the replacement facility on demonstrated cash generation, identifies lenders who take this profile at this size, and runs the refinancing to a completion date that clears the existing maturity.
Working capital
The cash cycle has outrun the balance sheet. Receivables and inventory are growing faster than retained earnings can fund them, and the existing overdraft is sized on the company, not on what it is owed.
- What we examine first
- Receivables ageing and dilution history. Buyer concentration and credit quality. Whether collections can be directed to a controlled account, and whether inventory is identifiable, insured and saleable.
- What has to be prepared
- An eligibility analysis of the receivables book, a borrowing-base model with advance rates and concentration limits, and evidence of collection performance over a full cycle.
- What KentRidge does
- Structures the facility so it draws and repays with the commercial cycle rather than sitting on the balance sheet, and negotiates the terms that decide how much is actually available: advance rates, eligibility and concentration.
Trade and commodity
A specific shipment or contracted flow needs funding between payment to the supplier and receipt from the buyer. The requirement is transactional and recurring, not a permanent addition to the capital structure.
- What we examine first
- Documentation of the underlying flow. Identity and payment record of the offtaker. Title to and control over goods in transit and in store. Performance on prior cycles.
- What has to be prepared
- A transaction map showing where title and risk sit at each stage, the documentary package behind a representative cycle, and the history of completed cycles with the same counterparties.
- What KentRidge does
- Structures the facility so repayment comes from the proceeds of the transaction financed rather than from general corporate cash, and takes it to lenders who underwrite flow, not balance sheet.
Acquisition and capex
An established business is acquiring, integrating or expanding capacity, and intends to fund it with debt instead of dilution. The timetable is usually set by someone else.
- What we examine first
- Quality of earnings at both entities. The integration assumptions embedded in the case. Headroom under existing debt and any consent required from incumbent lenders.
- What has to be prepared
- A funding structure that works if the target's assets are not available as security at completion, a debt capacity analysis on historic rather than projected earnings, and a timetable that a lender's credit process can actually meet.
- What KentRidge does
- Sizes the facility on what the business has earned, secures the consents the existing lenders will require, and runs the process against the transaction timetable rather than alongside it.
Asset-backed
Value sits in receivables, inventory, equipment or fixed assets that the balance sheet is not currently borrowing against. Usually the collateral exists but has never been evidenced to a lender's satisfaction.
- What we examine first
- Whether security can be perfected and enforced in the governing jurisdiction. Existing encumbrances. Who controls the asset, and the proceeds, on default.
- What has to be prepared
- An asset register that reconciles to the accounts, independent valuation where the asset class requires it, and a clear answer on enforceability in each jurisdiction where collateral sits.
- What KentRidge does
- Establishes what the collateral will actually support, sets advance rates by asset class with a monitoring regime to match, and takes the facility to lenders who lend against the asset itself, not the company.
A note on structure
The instrument matters less than the repayment mechanism. Which lenders underwrite a transaction follows from what repays it, and whether that source can be documented and controlled. That is why the questions above are the same five each time, and the answers never are.
Screening
Eligibility
These are the tests we apply before taking a situation forward. A transaction failing one of them is unlikely to reach credit approval at the lenders we work with.
Operating history
Three years or more of trading, with audited financial statements.
Earnings
Positive EBITDA, or a documented transaction-level margin where the facility is self-liquidating.
Repayment source
An identifiable source of repayment that can be evidenced and, where required, controlled.
Size
Debt requirements of approximately US$10m to US$50m.
Geography
Asia-Pacific, concentrated on Singapore, India and Southeast Asia.
Security
Collateral or contractual support that is perfectable and enforceable in the governing jurisdiction.
What is settled with lenders, not here
Pricing, tenor, advance rates, covenants, fees and conditions precedent are negotiated on the specific transaction and remain subject to each lender’s credit approval. Any structure we propose before lender engagement is preliminary. Meeting the criteria above means a transaction is worth preparing. It is not an indication that financing will be offered, or on what terms.
Contact
Enquiries
Send the size, the sector, the security available and the repayment source. We will tell you quickly whether it is something we can prepare.