Capital Structures Should Support Growth. Not Constrain It.
As a business grows, financing gets more complicated than simply borrowing more. Expansion, acquisitions, refinancing and balance-sheet clean-up all come down to the same question — how much leverage the business can carry, and on what terms. EquiFin helps promoters and CFOs work through that question, structure the right facility and carry the transaction through to lender sanction.
Acquisition Finance · Structured Debt · Refinancing
Where This Becomes Relevant
Corporate finance advisory tends to matter most when a business is entering a new phase:
- Funding Expansion — new capacity, markets or product lines, before the additional cash flow has come through.
- Financing an Acquisition — structuring debt across the acquisition vehicle, promoter contribution and the target’s own balance sheet.
- Refinancing Legacy Debt — replacing facilities that no longer fit: short tenures, high servicing, over-pledged collateral.
- Preserving Promoter Equity — funding growth with debt instead of dilution, without tipping into excessive leverage.
- Consolidating Multiple Facilities — bringing fragmented, uncoordinated banking relationships into one coherent structure.
What Lenders Actually Evaluate
Debt capacity isn’t just a function of collateral. Corporate lenders typically look at:
- Leverage (Debt/EBITDA) — not just the ratio, but the quality and stability of the earnings behind it.
- Interest Coverage — whether operating earnings comfortably clear interest obligations, with room for a downside.
- Cash-Flow Conversion — how much reported EBITDA is actually available in cash after working capital and capex.
- TOL/TNW — total outside liabilities measured against the company’s own capital base.
- Promoter Contribution — how much risk the promoters are carrying alongside the lender.
- Security Structure — not just what’s pledged, but whether it leaves room for future borrowing.
How the Financing Is Approached
We start with the transaction, not the product. That means understanding what the capital is for, testing how much debt the business can realistically carry, and structuring the facility — quantum, tenor, repayment, security — before it goes anywhere near a lender. Institutions are then approached based on sector and ticket appetite, not a mass mailing list. Sanction is a milestone, not the finish line: documentation, conditions precedent and disbursement still need to be seen through.
Matching Structure to the Transaction
There is no single corporate-debt product that fits every requirement:
| Transaction Situation | Potential Financing Approach |
|---|---|
| Capacity expansion | Long-term corporate term debt |
| Business acquisition | Acquisition / structured financing |
| Growth without equity dilution | Senior or structured debt |
| Legacy high-cost borrowing | Refinancing |
| Fragmented multi-bank facilities | Consolidation / restructuring |
| Larger or complex requirement | Syndicated / structured debt |
Indicative — the right structure depends on the transaction, financial profile and independent lender appraisal.
What EquiFin Does
Debt Structuring — quantum, tenor, repayment and security architecture.
Acquisition Financing — structures spanning the acquisition vehicle, promoter contribution and the target’s balance sheet.
Refinancing — improving maturity, security utilisation and overall cost.
Debt Syndication — coordinating multi-lender and consortium transactions.
Capital Structure Review — reading how existing and proposed borrowings sit against cash flow and future plans.
Why EquiFin
- We start with the capital structure, not a loan application.
- We think like the credit committee before we approach one.
- One point of contact from structuring through to disbursement.
- We approach lenders with actual appetite for the transaction — not a mass mailing list.
Frequently Asked Questions
What is corporate finance advisory?
Corporate finance advisory helps businesses evaluate and structure capital requirements related to growth, acquisitions, refinancing and balance-sheet optimisation. The work typically involves assessing debt capacity, structuring the financing requirement, preparing the transaction for institutional evaluation and supporting execution.
How is corporate debt capacity determined?
Debt capacity is generally assessed using a combination of operating cash flows, existing leverage, profitability, debt servicing obligations, financial ratios, security and the overall business risk profile. Lenders may use metrics such as Debt/EBITDA, interest coverage and leverage relative to net worth, while also evaluating the quality and sustainability of cash flows.
Does collateral determine how much debt a company can raise?
Collateral can influence lender comfort and security cover, but it does not independently determine debt capacity. For most corporate lending transactions, lenders also assess whether the underlying business can generate sufficient cash flows to service the proposed borrowing.
Does EquiFin provide loans directly?
No. EquiFin acts as an independent corporate finance and debt advisory firm. Financing decisions, terms and approvals remain subject to the independent evaluation and credit processes of the relevant capital providers.
A Capital Requirement Is Only the Starting Point.
The more important question is whether the proposed structure works for the business, the transaction and the lender evaluating it.
Discuss Your Capital Structure