The Blog

Musings on corporate finance, fund raising, capital markets and other matters

Picture from IoD London's Twitter account (@IoDLondon)
Picture from IoD London's Twitter account (@IoDLondon)

On 8th September, Claire Pidancet, Managing Director for Growth Capital at Altimapa, joined Alpesh Patel at the Institute of Directors (IoD) Masterclass on Financial Leadership in a Post-COVID World. The event was attended by SME entrepreneurs who were looking to better understand the availability of growth capital after COVID. Claire discussed the various types of capital providers and the range of financing options available.

Given that each SME is unique and has different requirements, Claire illustrated the landscape and highlighted the key questions SMEs should ask themselves before accessing the private debt market.

The choice of provider (bank, peer-to-peer, private debt, private equity, and so on) depends on the type of financing sought: equity, secured or unsecured lending, hybrid products. The type of products will depend on SME’s capital structure and growth plan (organic growth, strategic acquisition, internationalisation).

During the masterclass, participants responded to an online poll with questions about their financing needs and their growth strategy.

Results indicated that:

1 - SME entrepreneurs often rely on an internal source of funding.
Indeed, 47% of the participants have not accessed any type of external funding, while 31% have raised financing from traditional banks, 19% from Equity Investors and 3% from non-bank lenders.

2 - Participants would consider Equity Investment first for their next external funding round.

3 - Funding requirement is strongly associated with financing growth, whether in the form of organic growth, strategic acquisition or international expansion.

4 - While the pandemic has accelerated the need for external financing for almost half of the participants, only 9% have access to CBILS financing since May 2020.

When considering external funding, the SMEs in our panel intend to use it for growth, either organically, through acquisition or international expansion. This is such a positive message in the current context.

Yet, they tended to be less aware of the options available beyond traditional bank lending or equity finance. At Altimapa, we are dedicated to change the status quo and raise awareness amongst SMEs entrepreneurs by participating in industry events such as the one organised by the IoD.

But reach out to us directly! We know the private debt market inside out and can help you access the capital you need to execute your growth strategy.