Investment Planning

A company offering a loan is offering essentially a high risk product for a low reward, as the interest is the only gain the lender will receive.

In real terms the lender has to evaluate the risk by assessing how likely it is that a business will default on a loan, as the loss of the outstanding loan amount is typically of much greater value than the reward value of lending it.

Equally lenders are happiest with borrowing to increase capital expenditure (borrow to invest in long term tangible assets), as it allows them additional security should the worse happen.

As a rule lender are less interested in global domination and growth than it is in security and good business planning and preparedness.

This can vary from family members, private deals, contra deals, investment angels or venture capitalists each with differing needs.

Unlike lending from a high street lender, private investment will typically be investment in return for an equity stake in the business, it cannot be stressed enough that entering into an equity releasing venture must never be taken lightly and advice concerning what rights the investor will have, should be undertaken through a solicitor who will ensure the articles of association and the types of shares issued reflect the deal that you have agreed.

Whilst this may seem obvious to many, it is still very common that businesses leaders are not clear about the depth at which the conditions of an equity release deals can go into. Businesses need to be very sure that they understand the implications of a deal because once a deal is signed it’s done and there’s no going back.

Private investors typically want an investment plan to show growth and profitability and specifically for venture capitalists, it’s more common that investment to fund capital expenditure projects are ill suited in favour of leasing and HP, it’s all about flexibility and an exit strategy.

We don’t offer advice on whether to invest or whether to seek investment, but what we do offer is a service of planning investments, all too frequently businesses look for investment because they need cash, when often they haven’t planned what specifically they need the ‘cash’ for.

An investment planning consultation will frequently show that they investment isn’t actually needed or the level of investment is significantly less than first thought.

Planning, growing, developing your business in an informed way will not only save you significant time and money, but it takes the guess work out of success and allows you to achieve, or even exceed your business goals.

Please call us and let one of our highly experienced Management Consultants visit you for a free on site, no commitment business evaluation and an informal discussion about what we can do for you.