ALTERNATIVE FINANCING FORMS
FOR ENTREPRENEURS AND INVESTORS
3 questions to smart minds

Asset-based finance — a crisis-proof alternative to loans

For this 3 questions to Carl-Jan von der Goltz

Maturus Finance
Photo: Carl-Jan von der Goltz
12. Janu­ary 2021

Banks are curr­ently very active in lending — after all, the state is assum­ing 90 or even 100 percent of the default risk as part of the Corona aid. But this will not remain the case in the medium to long term, as govern­ment support will end in the fore­seeable future. Then many houses will cover them­sel­ves again in the real­lo­ca­tion. In addi­tion, compa­nies will of course have to repay the aid loans they have recei­ved at some point. In view of this, every entre­pre­neur is well advi­sed to find out about possi­ble alter­na­ti­ves when plan­ning finan­cing projects. Asset-based finance, for exam­ple, is beco­ming incre­asingly popu­lar among SMEs because it opens up a lot of room for maneu­ver both in stable phases and in times of crisis. 


For this 3 ques­ti­ons to Carl-Jan von der Goltz, Mana­ging Part­ner of Maturus Finance

1. If banks no longer follow suit, what obvious opti­ons does a company have?

Many compa­nies, espe­ci­ally manu­fac­tu­ring compa­nies or trad­ers, have an exten­sive inven­tory of machi­nes, vehic­les and raw mate­ri­als or well-stocked warehou­ses. In tradi­tio­nal finan­cing, these assets often do not play a decisive role, although in some cases they tie up enorm­ous values in the company. Howe­ver, with approa­ches such as sale and lease back, precis­ely such assets — for exam­ple, used machi­nery — can be used to gene­rate liqui­dity as part of pure inter­nal finan­cing. For this purpose, a company sells the corre­spon­ding assets and leases them back imme­dia­tely after­wards. Thus, it recei­ves new funds and can still conti­nue to use the machi­nes without interruption.

Another exam­ple: If an online retailer has rich current assets, for exam­ple, it can use the asset-based credit model. These object-based loans allow the company’s own inven­tory, raw mate­ri­als, merchan­dise, tangi­ble assets or land char­ges to be used as collateral.

2. What exactly does this do for companies?

These asset-based models often open up more finan­cing opti­ons than tradi­tio­nal loans — for exam­ple, in cushio­ning bott­len­ecks, in advance order finan­cing, in bridge loans, in succes­si­ons or acqui­si­ti­ons, in growth, in the rene­wal of busi­ness models and proces­ses, and even in restruc­tu­ring or turn­arounds. This is because the credit­wort­hi­ness of a company plays at most a secon­dary role for object-based finan­cing. Sale & Lease Back as well as Asset Based Credit provide quick and flexi­ble liqui­dity, which extends the entre­pre­neu­rial scope even in the special situa­tions mentio­ned above. Compa­nies can thus further diffe­ren­tiate their finan­cing struc­ture and reduce their depen­dence on a single finan­cial service provi­der. With a stra­te­gic mix, they adapt to diffe­rent scena­rios and can also react quickly on the finan­cial side in future crises. Thanks to the stream­li­ned and effec­tive sett­le­ment process, a company does not have to wait long for the funds it needs with object-based finan­cing. If corre­spon­ding valuable assets are available, the respec­tive amount can usually be made available within a few weeks. In the case of Sale & Lease Back and Asset Based Credit, the process of inspec­ting machi­nery and goods is highly profes­sio­na­li­zed and geared in such a way that it has no impact on the opera­ting business.

3. How do you see the next year or two shaping up? What chal­lenges await SME financing?

The next period will conti­nue to be charac­te­ri­zed by Corona, uncer­tain­ties, rest­ric­tions and cuts. Over­all, we expect diffi­cult months for SMEs. So far, the feared wave of insol­ven­cies has failed to mate­ria­lize — mainly due to the exten­sive aid measu­res and state inter­ven­ti­ons. Howe­ver, experts are convin­ced that the crisis will also be reflec­ted in massi­vely incre­asing restruc­tu­rings in the fore­seeable future. Alre­ady, the number of compa­nies being kept “arti­fi­ci­ally” alive by means of aid loans, payment defer­rals and short-time work is growing at an alar­ming rate. But even compa­nies that are still solidly posi­tio­ned will have to work on their struc­ture, proces­ses and busi­ness model. After all, Corona has chan­ged the markets perma­nently and once again acce­le­ra­ted the shift to digital.

The house bank will not always be able to provide solu­ti­ons here in the future. The pande­mic will not leave the tradi­tio­nal finan­cing market unsca­thed: Banks are expec­ting defaults by their corpo­rate custo­mers and a corre­spon­ding increase in the need for write-downs. This will certainly have a lasting impact on procu­re­ment policy. Many finan­ciers will act very hesi­tantly when it comes to new loans and will largely with­draw from sectors that are parti­cu­larly affec­ted and sensi­tive to the economy: Event orga­ni­zers, the hospi­ta­lity indus­try, retail, the auto­mo­tive indus­try and its suppli­ers, mecha­ni­cal engi­nee­ring and others. Accor­din­gly, there is a growing demand among entre­pre­neurs for alter­na­tive finan­cing opti­ons via credit plat­forms, facto­ring, debt funds or asset-based models.

About Maturus Finance

Maturus Finance GmbH is a bank-inde­pen­dent finan­cing company and offers inno­va­tive ways of corpo­rate finan­cing. The finan­cial services provi­der is the point of cont­act for medium-sized manu­fac­tu­ring compa­nies and dealers who are looking for alter­na­ti­ves to exis­ting banking rela­ti­onships as part of their current finan­cing struc­ture. Finan­cing solu­ti­ons are offe­red from a volume of EUR 250 thousand and up to EUR 15 million, in indi­vi­dual cases even beyond. This gene­rally corre­sponds to company sales of around five million to 200 million euros. Maturus Finance GmbH is head­quar­te­red in Hamburg, Germany, and since 2015 has also been v

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