Finance for Business Growth
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Finance for Business Growth
description
Finance for Business Growth. What is SME. Source : Dubai SME. What is SME. Source : Dubai SME. Life Cycle – Business Finance. IPO/ M&A. IB/ PE. Investment Banks Private Equity International Bank Syndication Bonds IPOs. Private Equity Sell Out IPOs M & A. VC. Internal Accruals - PowerPoint PPT Presentation
Transcript of Finance for Business Growth
Finance for Business Growth
What is SME
Sector
Services
Manufacturing
Trading
Micro Small Medium
Turnover Employees Turnover Employees Turnover Employees
Source : Dubai SME
What is SME
Sector
Services
Manufacturing
Trading
Turnover Employees
< = 3 mln < = 20
< = 10 mln < = 20
< = 9 mln < = 9
MicroTurnover Employees
< = 25 mln < = 100
< = 100 mln < = 100
< = 50 mln < = 35
SmallTurnover Employees
< = 150 mln < = 250
< = 250 mln < = 250
< = 250 mln < = 75
Medium
Source : Dubai SME
Life Cycle – Business Finance
Start up
Seed Capital
• Personal Savings
• Borrow from Friends/ Relatives
• Angel Investors
Growth
VC
• Internal Accruals• Further equity• Bank Finance• Venture Capital• PE with SME
Focus
Maturity
IB/ PE
• Investment Banks• Private Equity• International Bank
Syndication• Bonds• IPOs
Exit
IPO/ M&A
• Private Equity• Sell Out• IPOs• M & A
Growth Finance
Internal Accruals
Further Equity by Owners
Bank Finance
Financial Institutions
Finance
Venture Capital/
HNI Investor
Private Equity Funds
with SME focus
Bank FinanceBank
Finance
Financial Institutions
Finance
XYZBank$
Statutory Warning!!
Bank Finance – OptionsBank
Finance
Financial Institutions
Finance
• Business Loans
• Personal Loans
• Loan against POS
• Loan against Assets – Vehicle, Commodities, Property, Deposits
• Commercial Property Loan
• Equipment Loans – Commercial vehicles, medical equipment, construction equipment
• Working Capital Loans – Overdraft Facilities
• Trade Facilities – LC / TR
• PDC Discounting / Invoice Discounting / Export Bills Discounting
• Term Facilities
• Non-funded facilities - Bank Guarantees / Bonds
Bank Finance – Case Study
Industry : Oil & GasIdeal Way to Grow
Bank Finance
Financial Institutions/ Finance
No Longer SME
Year 2010 2011 2012 2013 2014 2015 2016Activity
Turnover 40 90 164 307 450 600 1000Net Profit 1 3 6 12 32 42 70
Internal Accruals 1 4 10 22 54 96 166Equity 2 4 6 11 11 11 11Net Worth 3 8 16 33 65 107 177
Facilities 5 20 40 73 113 150 250Number of Banks 0 4 6 10 12 10 9Average Facility Size 0 5 7 7 9 15 28Type of Facilities
Trading & ManufacturingTrading
LC/TR/OD LC/TR/OD & Medium Term Facility
AED mln
Bank Finance – Case Study Micro SME
Industry : Health & WellnessHow a Micro SME can fund itself
Bank Finance
Financial Institutions/ Finance
Year 2011 2012 2013 2014 2015Activity
Turnover 627,505 2,002,286 2,471,801 3,132,766 3,500,000 Net Profit 31,140 340,983 333,062 850,000 945,000
Net Worth 476,361 698,488 465,153 1,315,153 2,260,153
Facilities 0 0 0 2,000,000 Number of Banks 0 0 0 3Average Facility Size - - - 666,667
Type of Facilities
Services
NoneBusiness Loan
Commercial Property
Figures in AED
Equity FinanceVenture Capital/
HNI Investor
Private Equity Funds
with SME focus
SME INVESTOR
Statutory Warning!!
Equity Finance – Considerations for InvestorsVenture Capital
Private Equity Funds
with SME focus
• Owner Profile
• Management Team
• Governance Structure
• Product / Business - Lifecycle
• Market Potential
• Revenue Potential / Profit Potential
• Scalability of Business
• Uniqueness of Business / Competitive Advantage
• Systems and Processes
• Risk Factors
• Competitor & Customer Profile
• Investment Needed
• Valuation of Business
• Planned Use of Proceeds
• Exit Strategy
Growth Finance – Case StudyVenture Capital
Private Equity Funds
with SME focus
2010-2011* 2012 2013Revenues 1,556 2,158.09 1,833.52
COGS 1,108.68 1,320.04 1,138.55
Gross Profit 447.32 838.05 694.97
Operating Exp 1,561.8 794.50 447.12
EBITDA (1,114.48) 43.55 247.84
Net Profit (1,167.63) 7.05 207.31
*2010-11 period is for 18 months and the opex includes one time set up cost of $750,000.
Figures in ‘000 USDRevenue-EBITDA performance 2010-2013
Industry - Guest Room Technology Products and Solutions, catering to Hotel and Hospitality Sectors.
The company is a Zero Debt, Cash Flow Positive company, has grown its top line at a CAGR of 9% with an estimated CAGR growth of 52.7% in the next 5 years
Achieved an EBITDA margin of 13.5% & Net Profit margin of 11.3% in 2013
The company expects to grow top line from the current $1.83M to $15M in 2018 with net profit increase from $207K to $4.5M
GIC is raising USD 1.5 mn Equity from an HNI / Venture Capitalist for the Company
‘‘Always remember, the human mind, oncestretched by new ideas, never returns to its
original state, it keeps growing’’
His Highness Sheikh Mohammed bin Rashid Al Maktoum
About Us
What we continuously aspire for…
Our Vision
To be a preferred solutions provider to our clients and be a long term partner in their success by enhancing their performance and setting a benchmark of excellence
What we offer…
Solutions FrameworkManagement Solutions Financial Solutions Insurance Solutions Process Re-engineering Process/ Accounting/HR manuals Organization Restructuring Business Strategy Financial and Business feasibility Budgets and forecast systems Cost reduction
Fund Raising Solutions Project Finance Trade Finance Working Capital Finance Real Estate Finance Angel Equity Private Equity Finance on pledge of shares
Financial feasibility
Financial re-structuring
Financial appraisal
Post Transaction integration
Medical Insurance
Life Insurance
Fire Insurance
Motor Insurance
Marine, Hull Insurance
Third Party Liability
Professional Indemnity
