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Solu­ti­ons for Entrepreneurs 
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Thoughts

Home Thoughts

Alternative lending and services

Alternative financial services compensate banks retreat. What can you do?

  • What alter­na­ti­ves finan­ci­al ser­vices exist to arran­ge finan­cing, grow and pro­tect wealth, invest in or sell a com­pa­ny, or save on other services?
  • What can you do now to get your business financed?

  • You can make sure that your busi­ness is among tho­se inves­tors and len­ders judge worthwhile. And you can approach alter­na­ti­ve sources.
  • You can do more yours­elf or hire some­bo­dy to do it for you. Doing it yours­elf is what lar­ge cor­po­ra­ti­ons and fami­ly offices gene­ral­ly do and keeps you in full control.
  • Pre­sent your case the best way. If your case is fit­ting in len­ders wis­hes, your good CFO and trea­su­ry might get bet­ter terms than in the past.
  • Howe­ver, if you do not need such capa­bi­li­ties on a recur­rent basis, you might not haven such full-time func­tions in-hou­­se, but you can talk to us.
  • How can you have your assets and liabilities correctly managed?

  • Pay an advi­ser for the ser­vices you were used to recei­ve from the bank. It might save you money and pro­vi­de you a not con­flic­ted result. You pro­bab­ly have been pay­ing for bank advice any­way through expen­si­ve pro­ducts, cus­to­dy fees, exchan­ge rates, etc. We are con­fi­dent that we’ll find potential.
  • Plan for the lon­ger term than the time hori­zon of banks sale­speop­le. Think about and your suc­ces­si­on, wealth pre­ser­va­ti­on wit­hin the fami­ly, invest­ments or sale of the com­pa­ny or spe­ci­fic major assets and pro­per­ties. Such events should be pre­pa­red for long ahead.
  • How can you take advantage of rising opportunities

  • Crowd­fun­ding, peer-to peer len­ding, tra­di­tio­nal and alter­na­ti­ve debt pro­vi­ders, payment ser­vices, bro­kers and all kind of Fin­tech plat­forms are growing.
  • Howe­ver, if you are not only buy­ing ser­vices but asking for money, make yours­elf and your case attrac­tive for the coun­ter­part, make your finan­ci­als under­stan­d­a­ble and watch your rating.
  • You can easi­ly save money on smal­ler oppor­tu­nities such as for­eign exchan­ge or stock broo­king. As an examp­le: a dif­fe­rence bet­ween bid and ask of bank cur­r­en­cy exchan­ge rates 1-7%, depen­ding from amounts and cur­r­en­cy pairs, means 0.5 – 3.5% mar­gin on inter-bank rates. You, or we for sure can defi­ni­te­ly get bet­ter than that.
  • Mer­gers and Acqui­si­ti­on are beco­m­ing more dyna­mic also in the lower seg­ment. Rise and con­so­li­da­ti­on of plat­forms allow an ever fas­ter and broa­der reach to Inves­tors. Talk to us if you want to get ready for such transactions.

Less lending and service from Banks?

Less lending and service from banks?

Banks reduce SMEs lending services. What is happening?

  • Len­ding to non-finan­ci­al cor­po­ra­ti­ons in Euro­pe is decli­ning sin­ce years while much funds are idle and cen­tral banks’ inte­rests low. Banks redu­ce SMEs len­ding ser­vices espe­ci­al­ly in the stres­sed Euro peri­phe­ry with consequences.

  • Qui­te some banks are suf­fe­ring for ear­lier errors of len­ding, which in hind­sight has pro­ved incon­s­i­de­ra­te. Banks equi­ty and Total Loss-Absor­­bing Capa­ci­ty has often fal­len below the level nee­ded to absorb poten­ti­al los­ses on exis­ting assets. This makes it pro­hi­bi­ti­ve to extend addi­tio­nal loans. Regu­la­ti­ons con­se­quent­ly beco­me stric­ter and more com­pli­ca­ted. Risk awa­re­ness of bank offi­cers and use of risk manage­ment tools increa­sed. SME len­ding doesn’t look as that an attrac­tive allo­ca­ti­on wit­hin their new risk appe­ti­te, port­fo­lio stra­te­gy, and com­mer­ci­al policies.
  • Consequence

  • This has ope­ned oppor­tu­nities for new ent­rants in the mar­ket. Crowd­fun­ding, tra­di­tio­nal and alter­na­ti­ve debt pro­vi­ders, payment ser­vices, bro­kers and all kind of Fin­tech plat­forms are gro­wing. Such alter­na­ti­ves are eating away more reve­nues of banks on pro­ducts like for­eign exchan­ge tran­sac­tions or stock­bro­king, whe­re mar­gins were just huge.
    Arti­fi­ci­al Intel­li­gence opens fur­t­her oppor­tu­nities for boo­m­ing Fin­tech even on tasks such as rela­ti­ons­hip, port­fo­lio manage­ment and SMEs len­ding ser­vices. Banks thus will trans­form them­sel­ves even fart­her towards the­se new lower-cost com­pe­ti­tors or try to inte­gra­te them. An issue with this deve­lop­ment is that such chan­ges requi­re cli­ents’ know­ledge to shop for each pie­ce individually.
  • Outlook

  • Regu­la­ti­on will play an important part in how banks might keep their pri­ma­ry role in money crea­ti­on. In addi­ti­on to taking pre-exis­­­ting depo­sits of savers, banks lend to bor­ro­wers. This crea­tes depo­sits of new money wit­hin ratio­na­le limi­ta­ti­ons of pro­fi­ta­bi­li­ty, sol­vency and cen­tral banks reser­ves. Bank len­ding with money crea­ti­on might by design remain more effec­tive than the mere inter­me­dia­ti­on of loan­ab­le funds of most alter­na­ti­ve len­ders. But banks must iden­ti­fy and finan­ce worthwhile pro­jects . Worthwhile means in this case that their aggre­ga­te resi­du­al risk of non-repayment is wit­hin equity’s capa­ci­ty to cover and pro­pen­si­ty to risk such los­ses.
    Finan­ci­al reporting stan­dards such as IFRS 9 might have qui­te an influ­ence too on future loan port­fo­li­os and pri­cing.  They will con­si­der in more detail sec­tor, dura­ti­on, col­la­te­ral and rating.
  • Consequences

  • Finan­ci­al pro­ducts and ser­vices are beco­m­ing che­a­per and mar­gins dwind­le. Low inte­rest levels also moti­va­te well infor­med or advi­sed custo­mers to act. They drop often over­pri­ced pro­ducts such as cus­to­dy, FX or most­ly under-per­­for­­ming active asset manage­ment for che­a­per solu­ti­ons or mana­ge their assets and tran­sac­tions them­sel­ves. Banks thus have to cut ope­ra­ting costs and increa­se effi­ci­en­cy of rela­ti­ons­hip manage­ment, redu­cing also SMEs len­ding ser­vices. Full ser­vice is restric­ted to few cli­ents and focus put on attrac­tive loo­king pro­ducts. It is easy to sha­re many ana­lysts’ con­sen­sus of a lar­ge public com­pa­ny. And so is to extend a mortga­ge with low capi­tal requi­re­ments, until a pro­per­ty bub­b­le bursts. Even just buy­ing not real­ly risk-free sover­eign debt, ent­ails less risk of bla­me than ade­qua­te­ly ana­ly­se and assu­me risk of a startup.

What can I do?

External support to restructure companies in Greece

Taking advantage of recent changes for viable businesses.

Febru­ary 8th 2016, Dr. Dani­el H. Brüll­mann, www.arranger.ch,

After noti­cing in a pre­vious paper that the impro­ved Greek legal frame­work for insol­venci­es, which still seems dys­func­tio­nal in some aspects, and the recent reca­pi­ta­li­za­ti­ons of banks open oppor­tu­nities to com­pa­nies and entre­pre­neurs to rest­ruc­tu­re their busi­nes­ses, we address some of the steps to under­ta­ke for eit­her out-of-court or in-court rest­ruc­tu­ring to save long term sur­vi­val of a via­ble business.

Investment opportunities restructuring Greek businesses

Changes in regulation shall help restructuring Greek businesses

Invest­ment oppor­tu­nities are expec­ted along the process.

Febru­ary 2nd 2016, Dr. Dani­el H. Brüllmann

Amidst many evi­dent pro­blems in Greece the­re are also posi­ti­ve deve­lop­ments, which should not be over­loo­ked. Gra­du­al chan­ges to the legal frame­work for insol­venci­es and reca­pi­ta­li­za­ti­ons of banks open oppor­tu­nities for com­pa­nies to rest­ruc­tu­re their busi­ness and for credi­tors to impro­ve their low expec­ted reco­very rate. Com­plex and long pro­ce­du­res have been sim­pli­fied. Banks until now reti­cent have to take action. First lar­ge and com­pre­hen­si­ve rest­ruc­tu­rings have recent­ly emer­ged. Also medi­um sized com­pa­nies might be well advi­sed to shrug off hesi­ta­ti­ons and fol­low such examples.