Corporate debt for Australian businesses
Corporate debt, tailored & delivered as needed
Corporate businesses require funding for unique situations can secure a range of corporate debt solutions through RSC that are outside of typical bank funding parameters. Facilities range from traditional growth capital solutions right through to warehouse facilities. Typically, most corporate debt facilities are reserved for corporate entities making at least $2M in EBITDA p.a , but there can also be exceptions to this. Typical facilities include.
- First ranked senior corporate debt facilities, with a minimum $5m facility.
- Private corporate bonds, $10 minimum facilities either as senior or secondary debt.
- Lender or special service warehouse facilities, minimum $5M facilities.
- Competitive market rates.
- No director guarantees in some situations.
- Interest only or P&I amortised over a long period of time.
- Accept various forms corporate guarantees.
Work with us today, to discover a new way of corporate debt, tailored for you!
Private Corporate Debt Solutions, Made For You
When to use private corporate debt?
Private corporate debt is an optimal solution for medium-term facilities, typically 12 months to 5 years. Private corporate debt is typically used when you don't meet bank criteria, or when a bank can't service your full requirements. Typically, private corporate debt is used for.
- Merger and acquisition financing.
- When your business is rapidly growing, exceeding free cash flow requirements.
- Equity releases.
- Private equity share buy backs.
- Working capital requirements or purchases of large assets.
- When a warehouse facility is required for lenders.
- Specialised finance solutions for your customers, so they can buy your products.
Contact us today, so we can get you immediate access to funds!
CORPORATE DEBT, THE PROCESS?
Application process for your private corporate debt
At Royce Stone Capital because of the family offices and wholesale funds we work with, we have a unique streamlined methodology of providing corporate debt that keeps the process simple. Due diligence for corporate facilities typically includes.
- A minimum hurdle rate of $2M in EBITDA, however this flexible on the scenario.
- A minimum loan facility requirement of $5M, however this is also flexible on the scenario.
- Financials for the past 2 years (1 year is also sufficient), including management accounts and tax returns.
- Your corporate structure, key shareholders, director BIO and A&L of directors.
- Use of funds and the exit strategy.
Work with us today, to discover a new way of private corporate debt, tailored for you!
Corporate Debt, and the benefits with RSC
Advantages of private corporate debt with Royce Stone Capital
Getting a corporate finance solution through Royce Stone capital, means you get the flexibility and urgent funds you require to succeed. With our direct access to family offices, and other wholesale funds we can tailor a solution to fit your exact requirements. Just some of the advantages of working with us include.
- Having access to our corporate advisory solutions, to properly structure and maximise your transactions.
- Getting access to family offices who will directly support your corporate finance solutions.
- Unconventional financial products, whether you need a warehouse facility or a special debt facility to finance your clients so they can buy your products.
- Flexible GSA and key asset carve outs, to allow you to get other complimentary or mainstream funding solutions.
Contact us today, so to get a tailored corporate finance solution
Warehouse facilties for growing books
Warehouse facilities for lenders
We provide warehouse facilities for lenders that need more capital to grow their existing loan book. We can tailor warehouse facilities to help growing lenders, until such time they are able to get a warehouse facility from a bank or secure greater investment funds.
Typical warehouse facilities are used in conjunction with existing lender / investor capital, profit is made between the return of the fund and the WACC of all facilities. Features of the warehouse facilities we provide for include.
- $5M minimum facility
- Must have at least $7M of existing loans
- Return on capital must be at least 12% p.a paid quarterly.
- Concentration risk must be less than 10% exposure for any one deal, as a percentage of capital provided, higher if property security is the underlying asset.
Work with us today, to discover a new way of private corporate debt, tailored for you!
Specialised corporate debt
Warehouse facilities for SME corporate clients
For SMEs that provide specialised infrastructure or product solutions for large corporate clients. We have the ability to develop a hybrid finance / lease solution specifically for the corporate client to enable them to purchase the products /services of the SME, without it being labelled as a capital expenditure on their books. This means the capital cost can be treated as OPEX for corporates, whilst also providing them with a finance solution that amortises repayments over a period of time.
- $5M minimum facility
- Corporate guarantee must be provided for the facility.
- Corporate guarantee entity must have a market cap of at least $500Mn
- SME must provide a corporate and director guarantee.
Work with us today, to get your next warehouse facility tailored for you!
What are the interest rates for private corporate debt?
A private corporate debt loan is usually more expensive than a bank on face value based off interest rates, but it is cheaper in terms of the opportunity cost. As private lenders take on deals and more risk that a bank can't take on, helping borrowers to get funds when they otherwise couldn’t.
Usually, private corporate debt loans work on a 4% to 8% margin that is higher than BBSW rate / RBA rate. Depending on the asset class, risk, term of the loan and LVR of the loan.
What this means for corporate borrowers, is that as interest rates go up at a bank level, many private lenders become more competitive with a bank rate, as the difference between bank rates and private rates gets smaller.
For your next private corporate debt facility, contact us here.
What are the eligibility requirements for private corporate debt?
All our private corporate debt loans are for business or investment purposes only. To qualify for a loan you must meet the following criteria.
1. You must have an EBITDA of at least $2M in most cases.
2. The funds must be for equity release or business growth purposes (not personal use).
3. Minium transaction size is $5M.
4. You have an exit strategy to repay the loan (refinance, sale of asset, business venture).
5. You can service the interest cost or pay it in advance out of the loan amount.
For your next private corporate debt facility, contact us here.
What is a warehouse facility?
A warehouse facility is a wholesale funding solution that aims to fund lenders with a cheaper cost of capital, so they can then use those funds to expand their loan book size. This enables them to borrow funds to expand their loan book, until such time they can secure more investor capital or a warehouse facility from a bank.
For your next private corporate debt facility, contact us here.
How quickly can a private corporate debt transaction be funded?
How quickly can you put your paperwork together? Usually, we can settle deals within two weeks to four weeks, depending on complexity.
For your next private corporate debt facility, contact us here.
What is the difference between private corporate debt and bank terms?
Private corporate debt lenders (PCD) have far less restrictions and prerequisites when compared with traditional bank funding. Because private corporate debt lenders are willing to take on more risk than a bank and are willing to do transactions that banks won't do, PCD is priced higher than commercial bank loans. Typically the delta is 3% to 4% between what a bank rate would be, and what a PCD rate would be.
Where for example a bank might require two years of trading history, a private corporate debt lender can accept only 1 year.
Where a bank would look at historical performance of the business only, with very little appreciation of future growth. Private corporate debt lenders look at how capital will be deployed and the future cash inflows from such activities.
Where a bank would apply a strict P&I repayment ratio, or debt coverage ratio. Private corporate debt lenders can offer higher lending ratios, and or interest only repayments.
For your next private corporate debt facility, contact us here.
