ISSUE OF SHARES AND BONDS. PREFERENTIAL BUSINESS LOANS IN UKRAINE. TRANSACTION SUPPORT FROM UBC

Business financing: loan, guarantee, bonds or another model

A need for money does not always mean that a company needs a standard bank loan. The financing method depends on the objective: purchasing equipment, constructing a production facility, replenishing working capital, financing an import contract, buying out an interest or restructuring debt require different instruments and different evidence packages.

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Preparation for bank financing

A bank assesses more than collateral. It analyses cash flow, tax discipline, credit history, ownership structure, related persons, realism of the budget and the business's ability to service debt under a downside scenario. Even a strong project may be declined if contracts, financial statements and explanations of the repayment source are inconsistent.

The package usually includes constitutional documents, financial and management reporting, bank statements, contracts with key clients and suppliers, information on collateral, group structure, tax returns and a cash-flow forecast. An investment loan requires a feasibility study or business plan with clear assumptions.

Alternative banking instruments

For a particular transaction, a bank guarantee, letter of credit, factoring, trade finance, avalised bill of exchange or another documentary instrument may be cheaper than a loan. The choice depends on who bears supply risk, when the payment obligation arises and which documents confirm performance.

Capital markets and issue of securities

An earlier review considered a bond loan and an additional share issue as alternatives to bank lending. Such financing can provide a more flexible term, a different approach to security and a broader investor base, but requires corporate preparation, disclosure, a legal structure for the issue and a realistic repayment model.

An additional issue may be used not only to raise funds but also within an acquisition or change-of-control structure. Before the transaction, the rights of existing shareholders, placement price, dilution, corporate approvals, tax consequences and regulator requirements are assessed.

Syndicated and project financing

For a large project, one lender may not accept the entire risk. Financing is then distributed among several banks or investors. A single information memorandum, agreed financial model, security mechanism, creditor decision-making procedure and control of the use of funds are required.

Management and financial consulting

Financing should be part of strategy rather than a reaction to a cash-flow shortfall. The company needs to define an acceptable debt level, liability currency, liquidity reserve, rules for managing receivables and scenarios in the event of declining sales.

During a merger or acquisition, the financial position of the target company, rights to assets, hidden liabilities, litigation, dependence on key customers and the possibility of a seamless transfer of management are checked separately.

Result

A properly prepared financing project contains more than a loan application. It shows the repayment source, risks, security, legal structure of the transaction and an action plan if actual performance deviates from the forecast. The cost of support is determined individually after analysing the objective, amount, term and condition of the documents. Contact: info@ubc.ua.

Why is it better with us?

The UBC group of companies provides consulting and investment services for the development of your business, assistance in obtaining loans, the search for business partners and investors for new projects, and assistance in the purchase and sale of ready-made businesses, enterprises and commercial real estate in Ukraine and abroad. Basic services: registration of enterprises in Ukraine, Europe and other countries, opening bank accounts, corporate law, offshore jurisdictions and offshore companies, business consulting, audit, certification, registration of financial companies, asset management companies, mutual investment funds, registration of joint-stock companies, issuance of securities and bonds, support for foreign investments, construction licences, obtaining design and construction permits, and other services for successful business in Ukraine — we provide our clients with a full turnkey package in the shortest possible time!

We always work toward the result you need and will do absolutely everything to achieve it within the required timeframe, taking into account your wishes and requirements!

Our broad and constantly expanding network of regional and foreign partners promptly helps to resolve our clients' issues when doing business both in Ukraine and abroad.

Why is it better to start a business in Ukraine with UBC? The answer is simple — we have much more experience, resources and opportunities.

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