With improvements in the economy, funding gaps in the banking system are being filled with asymmetri
The past ten years have been bleak for SME promoters looking for funding. We were all used to a glut of cheap credit being thrown around by banks like confetti at a wedding. Lending for SMEs evolved from the bank manager’s golf club friends and pillars of the community to more democratic arrangements, where so long as borrowers had property to secure them, loan cheques were being written to all and sundry. No heed was paid to company balance sheets, cash flow projections or t
For SMEs, forget bank loans to fund growth. Now equity investment is the only show in town, but the
In or about 2005, at meetings of the Alliance of Business Lawyers of which my firm was the Irish representative, I would describe the capital stack in SMEs here to my European colleagues. Invariably they were confused by the preponderance of bank debt in the capital structures of what were micro businesses by their standards. The banks’ exposure to this risk didn’t make sense to them, and because it was all that I knew, I was bemused by what I took to be misunderstandings of
