Working capital is the money tied up in a company’s day-to-day operations, such as inventories, trade receivables and work in progress. When sales are growing, seasonal fluctuations are large or customers’ payment terms are long, cash can run tight even if the business is profitable. With working capital financing, a company secures its liquidity and can seize growth opportunities without its running expenses suffering. Finanssitaito analyzes your company’s cash flow and financing needs to find the most suitable solution and financier for you.
Factoring is a form of invoice financing in which a company turns its sales invoices into cash immediately by selling its accounts receivable to a financier instead of waiting for customers to pay. Factoring improves cash flow and is particularly well suited to B2B companies offering long payment terms, for example in wholesale, manufacturing, and logistics.
In purchase invoice financing, the financier pays the company’s purchase invoices to the supplier, and the company repays the amount to the financier later on an agreed schedule. This gives the company more time to pay without straining its supplier relationships. Purchase invoice financing is particularly well suited to companies that buy in large volumes in advance, for example in retail, construction, and manufacturing.
In supply chain financing (also known as reverse factoring), a buyer company sets up an arrangement with a financier that allows its suppliers to have their invoices paid early based on the buyer’s stronger creditworthiness. At the same time, the buyer can extend its own payment terms to suppliers. Supply chain financing is particularly well suited to large buyers with an extensive supplier network, such as manufacturers, retail chains, and construction companies.
With leasing, a company gains the use of equipment such as machinery, devices and vehicles without large one-off investments. The costs are spread evenly over the contract period, which makes cash management easier. Leasing is particularly well suited to equipment-intensive sectors such as construction, logistics, agriculture, and manufacturing.
An overdraft facility and an RCF (revolving credit facility) are flexible credit arrangements allowing a company to draw funds as needed up to an agreed limit and repay them according to its cash position. They are particularly well suited to companies with fluctuating cash flow, for example in seasonal retail, tourism, construction, and project-based businesses.
In inventory financing, the company’s inventory serves as collateral for the financing, allowing capital tied up in inventory to be utilized even before the products are sold. Inventory financing is particularly well suited to companies with valuable or seasonally growing inventories, such as wholesalers, retailers, importers, and manufacturers.
Collateral and guarantees play a critical role in how much financing a company can obtain and on what terms. When collateral is scarce or tied up in existing arrangements, growth and new projects can stall or even come to a halt. With properly arranged collateral and guarantees, a company frees up financing capacity and strengthens its negotiating position. Finanssitaito analyzes your company’s collateral position to find the most suitable solutions and financiers for you.
With a bank guarantee, a bank commits to paying an agreed amount if the company fails to meet its obligations toward a contractual partner. Bank guarantees are used, for example, as payment, rent, bid, and delivery guarantees, and they strengthen the company’s credibility in new business relationships.
With a surety bond, an insurance company provides a guarantee on the company’s behalf, for example for a construction, supply, or bid contract. Surety bonds are an alternative to bank guarantees and usually do not tie up the company’s bank credit lines. They are particularly well suited to companies in construction, manufacturing, and project-based delivery.
The available collateral value of real estate often goes unused. For example, if a property’s collateral value is €2 million and €1 million of debt remains, the difference can secure new financing. The company’s main bank is often reluctant to accept a second-priority pledge, but a new, lower-priority mortgage certificate can be obtained on the property for a new financier.
Existing financing arrangements can tie up an excessive amount of collateral, making it harder to obtain new financing. Besides using mortgage certificates of different priority, a company can unlock available collateral value by restructuring its loans, which frees up tied-up collateral for new financing. Restructuring is also an opportunity to seek better terms, such as a lower interest rate.
With a public guarantee, a state-owned financing company such as Finnvera guarantees part of a company’s bank loan when its own collateral is insufficient. The guarantee reduces the financier’s risk and makes financing possible in situations such as growth, investments, and ownership changes.
An unsecured loan is granted based on the company’s cash flow and creditworthiness, without real estate collateral or liens on business assets. It is a quick solution for needs such as working capital or smaller investments when collateral is not available or the company wants to reserve it for other financing.
Construction projects often require performance, advance payment, and warranty bonds, as well as insurance coverage during construction. Finanssitaito helps arrange the required collateral and insurance cost-effectively so that they do not unnecessarily tie up the company’s financing capacity.
Investments and growth often require more capital than a company’s cash flow alone can cover. Properly sized and well-timed financing makes new machinery, facilities, and markets possible without jeopardizing day-to-day liquidity. Finanssitaito helps you find the right financing solution for your investment or growth phase, whether a bank loan, public funding, or a combination of the two.
Investment loans finance long-term purchases such as machinery, equipment, and business premises. The loan amount and repayment schedule are set according to the returns the investment generates.
Growth ties up cash: as sales increase, inventories, accounts receivable, and purchases grow before the revenue reaches the bank. That is why even profitable growth can strain liquidity. Working capital financing can strengthen cash flow during the growth phase.
Public funding refers to grants and loans awarded by public bodies such as Business Finland and Finland’s regional Economic Development Centres. Public funding can reduce the company’s own share of an investment or make development and internationalization projects possible. Finanssitaito helps identify suitable types of funding and combine them with other financing.
Some financing needs call for a tailored solution that combines several financiers, types of financing, or priority levels. Examples include business acquisitions, major investments, and real estate projects. Finanssitaito designs the financing structure as a whole and invites competitive offers from suitable financiers.
Financing often determines whether a business acquisition goes ahead and on what terms. We help buyers put together the financing for the purchase price from sources such as bank loans, junior loans, and seller notes. We help sellers prepare the company as a financeable target, which broadens the pool of potential buyers and supports the purchase price.
A junior loan ranks below a bank loan in priority and sits between equity and senior debt. It supplements financing when a bank loan alone is not enough, for example in a business acquisition, a growth project, or an ownership restructuring, and the owners do not want to dilute their stake.
With a bond, a company raises financing directly from investors instead of, or alongside, a bank loan. Bonds are particularly well suited to established companies whose financing needs run to tens of millions of euros and that are looking for more flexible terms.
In a syndicated loan, several financiers share one large loan on common terms, usually with a common collateral package. The arrangement makes it possible to obtain financing that is too large for a single bank and reduces the company’s dependence on any one financier.
In project financing, the loan is sized and repaid based on the project’s own cash flow, and the project is often separated into its own company. Project financing is well suited to construction, energy, and real estate projects, for example, where revenue is generated only after the project is completed.
In real estate development, financing is needed from land acquisition and zoning all the way to construction and leasing, and the need changes as the project progresses. The financing is structured according to the project’s phases, from construction-period financing to long-term financing of the completed property.
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