Stacking involves putting together a mix of financing forms that complement each other. For example, consider combining a bank loan with leasing, a loan through a regional development company or even a contribution from an investor. Strategically combining these different sources creates a financing structure that better suits your company's specific needs and growth stage. A big advantage is that it allows you to spread the risk. You are no longer dependent on one financier, and you also get more flexibility. This allows you to tailor funding to different parts of your business or specific projects. Moreover, a smart combination of financing forms can lead to a more favourable cost structure and, not unimportantly, access to more capital than you would get with one source.
Why precisely now?
The financing market has changed considerably in recent years. Banks have become more cautious, especially for loans under EUR 1 million. At the same time, many new forms of financing and providers have emerged. Think of crowdfunding platforms, factoring companies, leasing companies, regional funds, subsidy programmes and informal investors. For entrepreneurs who want to look beyond the traditional route, there are now plenty of opportunities.
What does that look like in practice?
A good example is a marketing agency that wants to strengthen its market position by acquiring a competitor. The acquisition price is €2.8 million. The financing will be made up of several layers: specialised acquisition financing from a bank or alternative lender (€1,200,000), partly secured by the assets of the party to be acquired. That is complemented by a vendor loan, where the selling party co-finances a portion (€500,000), which shows confidence in the transaction and the buyer. And there is a factoring arrangement based on the debtors of both companies. There is entered into a factoring contract (€1,100,000). This is flexible and fills the 'gap' between bank financing and equity. That mix makes the acquisition feasible and financially sound.
Strategic stacking pays off
Putting together a financing mix requires customisation. It requires insight into the available instruments, a clear picture of your business goals as well as a sharp analysis of where your financial bottlenecks or opportunities lie. But if done right, this strategy can not only make your company stronger, but also more future-proof.
Do you want to know how your financing structure can be made smarter? Or are you curious about what possibilities there are besides the bank? We would be happy to think along with you.