STAGE FIVE
Strategy Implementation Quote
SET UP GET THE RIGHT STRUCTURE BEHIND
This guide describes all the steps, processes, and scope of the Strategy Implementation Quote.
At Cahero Capital we have the integration of financial instruments that allow our clients to enhance their company's performance and as a consequence generate organic growth. To create the implementation of the Capitalization Strategy according to the requirements of the Startup, Company or Government Institution, we can use the following instruments:
1. Corporate finance
Corporate finance is the subfield of finance that deals with how corporations approach funding sources, capital structuring, accounting, and investment decisions. They are often concerned with maximizing shareholder value through long- and short-term financial planning and various strategies. Corporate finance activities range from capital investment to tax considerations.
Within corporate finance we offer you:
1.1. Project finance
Project finance is the financing of long-term infrastructure, industrial projects, and utilities using a non-recourse or limited recourse financial structure. The debt and equity used to finance the project are repaid from the cash flow generated by the project.
Project finance is a loan structure that relies primarily on project cash flow for repayment, with project assets, rights, and interest as secondary collateral. Project finance is particularly attractive to the private sector because companies can finance major off-balance sheet (OBS) projects.
1.2. Equity financing
Equity financing is the process of raising capital through the sale of shares. Companies raise money because they may have a short-term need to pay bills, or they may have a long-term goal and require funds to invest in their growth. By selling stock, a company is effectively selling ownership of its business in exchange for cash.
Equity funding comes from many sources: for example, friends and family of an entrepreneur, investors, or an initial public offering (IPO). An IPO is a process that private companies undergo to offer shares of their business to the public in a new stock issue. A public stock issuance allows a company to raise capital from public investors. Industry giants, such as Google and Facebook, raised billions in capital through IPOs.
While the term equity financing refers to the financing of public companies listed on an exchange, the term also applies to the financing of private companies.
1.3. Mergers and acquisitions
Mergers and acquisitions (M&A) is a general term that describes the consolidation of companies or assets through various types of financial transactions, including mergers, acquisitions, consolidations, tender offers, asset purchases, and management buyouts. The term M&A also refers to the desks of financial institutions engaged in such activity.
1.4. Strategic alliances
A strategic alliance is an arrangement between two companies to undertake a mutually beneficial project while each retains its independence. The arrangement is less complex and less binding than a joint venture, where two companies pool resources to create a separate business entity.
A company may enter into a strategic alliance to expand into a new market, improve its product line or develop an advantage over a competitor. The agreement allows two companies to work toward a common goal that will benefit both. The relationship can be short or long term and the agreement can be formal or informal.
1.5. Joint venture
A strategic joint venture is a business arrangement between two companies that make an active decision to work together, with the collective goal of achieving a specific set of objectives and increasing their respective bottom lines.
Through this arrangement, the companies effectively complement each other's strengths, while compensating for each other's weaknesses. Both companies share the benefits of the joint venture while absorbing the potential risks involved. Strategic joint ventures can be viewed as strategic alliances, although the latter may or may not involve a legally binding agreement, while the former does.
Unlike mergers and acquisitions, strategic joint ventures need not necessarily be permanent partnerships. Moreover, both companies maintain their independence and retain their identity as individual companies, allowing each to pursue business models outside the mandate of the partnership.
1.6. Capital markets
Capital markets are where savings and investments are channeled between providers (individuals or institutions with capital to lend or invest) and those who need it. Providers typically include banks and investors, while those seeking capital are companies, governments, and individuals.
Capital markets are composed of primary and secondary markets. The most common capital markets are the stock market and the bond market.
Capital markets seek to improve transactional efficiency. These markets link providers with those seeking capital and provide a place where securities can be exchanged.
1.7. MIGA:
The Multilateral Investment Guarantee Agency is an international institution that promotes investment in developing countries by providing insurance against political and economic risks.
By promoting foreign direct investment in developing countries, the agency aims to support economic growth, reduce poverty, and improve people's lives.
2. Structured Debt
Structured debt generally refers to a combination of different financial debt products that are designed to be placed side by side to cover the total amount of funds needed. The overall objective of structured debt is to provide capital to assist business growth. Structured debt also offers great benefits for businesses, such as royalty payment methods and restructuring plans that accelerate profits and growth.
This type of corporate financing is used to help inject substantial amounts of capital into larger or more complex businesses, structured debt is often a financing option used by SMEs looking to scale their growth plans, develop new product lines, refinance existing debt, and acquire other SMEs or restructure equity ownership.
2.1. Restructuring
Restructuring is an action taken by a company to significantly modify the financial and operational aspects of the company, generally when the company faces financial pressures. Restructuring is a type of corporate action that involves significantly modifying a company's debt, operations, or structure as a way of limiting the financial damage and improving the business.
When a company has difficulty making its debt payments, it often consolidates and adjusts the terms of the debt in a debt restructuring, creating a way to repay bondholders. A company may also restructure its operations or structure by cutting costs, such as payroll, or downsizing by selling assets.
2.2. Acquisition financing
Acquisition financing is capital raised for the purpose of purchasing another business. It allows users to satisfy their current acquisition aspirations by providing immediate resources that can be applied to the transaction.
2.3. Leveraged buyout
A leveraged buyout (LBO) is the acquisition of another company using a significant amount of borrowed money to cover the cost of the acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company.
2.4. Management buy-out
A management buy-out (MBO) is a transaction in which a company's management team purchases the assets and operations of the company it manages. A management buyout is attractive to professional managers because of the greater potential rewards and control of owning the company rather than being employees.
2.5. Management buy-in
A management buy-in (MBI) is a corporate action in which an external manager or management team acquires a majority stake in an external company and replaces its existing management team. This type of action may occur when a company appears to be undervalued, mismanaged, or requires succession.
2.6. Structured finance
Structured finance is a highly involved financial instrument that is presented to large financial institutions or companies with complicated financial needs that are not satisfied with conventional financial products. Since the mid-1980s, structured finance has become popular in the financial industry. Collateralized debt obligations (CDOs), synthetic financial instruments, collateralized bond obligations (CBOs), and syndicated loans are examples of structured finance instruments.
2.7. Syndicated loans
A syndicated loan, also known as a syndicated bank facility, is financing offered by a group of lenders, called a syndicate, that work together to provide funds for a single borrower. The borrower may be a corporation, a large project, or a sovereign government. The loan may involve a fixed amount of funds, a line of credit, or a combination of both.
Syndicated loans arise when a project requires a loan that is too large for a single lender or when a project needs a specialized lender with expertise in a specific asset class. Loan syndication allows lenders to spread risk and participate in financing opportunities that may be too large for their individual capital base. Interest rates for this type of loan can be fixed or floating, based on a benchmark rate such as the London Interbank Offered Rate (LIBOR). LIBOR is an average of the interest rates that major global banks borrow from each other.
2.8. Trade finance
Represents the financial instruments and products used by companies to facilitate international trade. This makes it possible and easier for importers and exporters to conduct commercial transactions through trade. Trade finance is a generic term that means it covers many financial products that banks and companies use to make trade transactions feasible.
2.9. Export Credit Agency
Trade finance represents the financial instruments and products used by companies to facilitate international trade. Trade finance makes it possible and easier for importers and exporters to conduct trade transactions through trade. Trade finance is a generic term that means it covers many financial products that banks and companies use to make trade transactions feasible.
3. Capital Investments
Capital investment is the raising of money by a company to further its business goals and objectives. The term can also refer to the acquisition of long-term assets by a company, such as real estate, manufacturing plants, and machinery.
3.1. Fixed interest rate
A fixed interest rate is an unchanging rate charged on a liability, such as a loan or a mortgage. It may apply for the entire term of the loan or for only part of the term but remains the same for a given period. Mortgages may have multiple interest rate options, including one that combines a fixed rate for part of the term and an adjustable-rate for the balance. These are known as "hybrids”.
3.2. Cash equivalents:
Cash equivalents are investment securities held for short-term investments; they have high credit quality and are highly liquid.
Cash equivalents, also known as "cash and cash equivalents," are one of the three main asset classes in financial investment, along with stocks and bonds.
These securities have a low-risk, low-yield profile and include U.S. government Treasury bills, bank certificates of deposit, bankers' acceptances, corporate commercial paper, and other money market instruments.
3.3. Cash investment
Acash investment is a short-term obligation, generally less than 90 days, that provides a return in the form of interest payments. Cash investments generally offer a low return compared to other investments. They can also have very low levels of risk, in addition to being insured by the Federal Deposit Insurance Corporation (FDIC).
A cash investment also refers to a direct financial contribution by an individual or company to a business, as opposed to borrowed money.
3.4. Growth investing
Growth investing is an investment style and strategy that focuses on increasing an investor's capital. Growth investors typically invest in growth stocks, i.e., young, or small companies whose earnings are expected to grow at an above-average rate compared to their industry sector or the overall market.
Growth investing is very attractive to many investors because buying shares in emerging companies can provide impressive returns (provided the companies are successful). However, these companies are unproven and therefore often present quite a high risk.
Growth investing can be contrasted with value investing. Value investing is an investment strategy that involves selecting stocks that appear to trade for less than their intrinsic or book value.
3.5. Investment property
An investment property is a real estate property purchased with the intention of earning a return on the investment, either through rental income, the future resale of the property, or both. The property may be held by an individual investor, a group of investors, or a corporation.
An investment property can be a long-term endeavor or a short-term investment. With the latter, investors often engage in flipping, where real estate is purchased, remodeled, or renovated, and sold at a profit in a short period of time.
The term investment property can also be used to describe other assets that an investor purchases for the sake of future appreciation, such as art, securities, land, or other collectibles.
3.6. Investor shares
Investor shares are a class of mutual fund shares that are specifically structured for investment by individual (retail) investors, as opposed to institutional investors. Investor shares are most often offered in open-end mutual funds.
4. Working capital
Working capital, also known as networking capital (NWC), is the difference between a company's current assets (cash, accounts receivable/customer unpaid invoices, inventories of raw materials and finished goods) and its current liabilities, such as accounts payable and debt.
Working capital is a measure of a company's liquidity, operating efficiency, and short-term financial health. If a company has substantially positive working capital, then it should have the potential to invest and grow. If a company's current assets do not exceed its current liabilities, then it may have trouble growing or paying creditors, or even go bankrupt.
4.1. Factoring
Invoice financing or factoring is a way for companies to borrow money against amounts owed by customers. Factoring helps companies improve cash flow, pay employees and suppliers, and reinvest in operations and growth sooner than they could if they had to wait until their customers pay their balances in full.
Companies pay a percentage of the invoice amount to the lender as a fee for borrowing the money. Invoice financing can solve the problems associated with customers who take too long to pay, as well as difficulties in obtaining other types of business credit.
4.2. Asset-based lending
Asset-based lending is the business of lending money in an arrangement that is secured by collateral. An asset-based loan or line of credit may be secured by inventory, accounts receivable, equipment, or other property owned by the borrower.
The asset-based lending industry serves businesses, not consumers. It is also known as asset-based financing.
4.3. Supply chain finance
Supply chain finance (SCF) is a term that describes a set of technology-based solutions that aim to reduce financing costs and improve business efficiency for buyers and sellers linked in a sales transaction. SCF methodologies work by automating transactions and tracking invoice approval and settlement processes from inception to completion. Under this paradigm, buyers agree to approve their suppliers' invoices for financing by a bank or other external financier, often referred to as "factors." And by providing short-term credit that optimizes working capital and provides liquidity to both parties, SCF offers distinct advantages to all participants. While suppliers get quicker access to the money owed to them, buyers have more time to pay their balances. On either side of the equation, the parties can use the cash available for other projects to keep their respective operations running smoothly.
Supply chain finance is a solution that improves cash flow by allowing companies to lengthen payment terms to their suppliers and, at the same time, gives their large and SME suppliers the option to get paid early. This results in a win-win situation for the buyer and supplier. The buyer optimizes working capital, and the supplier generates additional operating cash flow, thus minimizing risk throughout the supply chain. There is no cost to the buyer and Trade-Pay does not affect any current financing structure. Contact the experts at Cahero Capital to customize a complete, compliant solution designed specifically to move your business forward.
4.4. Floor plan financing
Floorplanning is a form of retail financing for high-value items displayed on showroom floors or lots. Specialty lenders, traditional banks, and manufacturers' finance arms provide short-term loans to retailers to purchase items and are then repaid as the items are sold.
Automobile dealers use floor plan financing to manage their new and used car businesses. A floor plan is a type of inventory financing.
Our floor plan financing options allow dealers to finance almost any type of unit traded-in. Lines of credit are customizable, flexible, and accessible through our extensive inventory sourcing network. Attract more business through Cahero Capital's floor plan financing programs designed specifically for dealers and equipment manufacturing companies.
5. Equipment Financing
Equipment financing describes a loan or lease that is used to obtain business equipment. Business equipment can be any tangible asset other than real estate; examples include office furniture, computer equipment, machines used in manufacturing, medical equipment, and company vehicles.
5.1. Capital lease
A capital lease is a contract that entitles a lessee to the temporary use of an asset and has the economic characteristics of ownership of the asset for accounting purposes.
5.2. Operating lease
An operating lease is a contract that allows the use of an asset but does not transfer ownership rights to the asset.
5.3. Hire purchase agreement
A hire purchase agreement is an agreement to purchase expensive consumer goods, in which the buyer makes a down payment and pays the balance plus interest in installments. The term installment plan is commonly used in the United Kingdom and is more commonly known as an installment payment plan in the United States. However, there can be a difference between the two: with some installment plans, the buyer obtains the ownership rights as soon as the contract is signed with the seller. With installment purchase contracts, ownership of the goods is not officially transferred to the buyer until all payments have been made.
5.4. Chattel Mortgage
A chattel mortgage is a loan that is used to purchase an item of personal property, such as a manufactured home or a piece of construction equipment. The property, or chattel, secures the loan and the lender has an interest in the property.
A chattel mortgage differs from a regular mortgage in that the loan is secured by a lien on a stationary property, such as a house or office building.
6. Insurance
Insurance is a contract, represented by a policy, in which a person or entity receives financial protection or reimbursement for losses from an insurance company. The company pools customer risks to make payments more affordable for policyholders.
Insurance policies are used to protect against the risk of financial loss, both large and small, that may result from damage to the insured or the insured's property, or from liability for damage or injury caused to a third party.
6.1. Transport cargo
Cost, Insurance, and Freight (CIF) is an expense paid by a seller to cover the cost, insurance, and freight of a buyer's order while in transit. The goods are exported to a port named in the sales contract. Until the goods are fully loaded onto a transport vessel, the seller bears the costs of any loss or damage to the product. In addition, if the product requires additional customs duties, export formalities, or inspections or rerouting, the seller must cover these costs. Once freight is charged, the buyer is responsible for all other costs. CIF is similar to but not the same as transportation and insurance paid for (CIP).
Cargo insurance protects you from economic loss due to damage or loss of cargo. It pays you the amount you are insured for if a covered event occurs on your freight. And these covered events are usually natural disasters, vehicle accidents, cargo abandonment, customs rejection, acts of war, and piracy.
6.2. General liability
Commercial General Liability (CGL) is a type of insurance policy that provides coverage to a business for bodily injury, personal injury, and property damage caused by the business's operations, products, or injuries occurring on the business's premises. Commercial general liability is considered comprehensive commercial insurance, although it does not cover all risks a business may face.
Mistakes made in your company's professional services, which professional liability insurance can help cover. Liability is protection against the financial impact of a claim made against you by a third party for injury or damage caused by the operation of your business. This includes the cost of lawsuits, settlements, medical damages, and more.
6.3. Workers’ compensation
Worker's compensation is a government-mandated system that pays monetary benefits to workers who are injured or disabled in the course of their employment. Workers' compensation is a type of insurance that provides employees with compensation for injuries or disabilities sustained as a result of their employment.
In general, worker's compensation also covers legal expenses and lost income benefits. Workers compensation insurance, OAI, is an insurance option that provides both employees and their employers with a certain level of financial protection in the event of an on-the-job injury.
6.4. Commercial auto policy: a commercial auto policy (BOP) provides coverage for the use of a company's cars, trucks, vans, and other vehicles in the course of conducting its business. Coverage may include vehicles owned or leased by the business, hired by the business, or employee-owned vehicles used for business purposes. A BAP covers both liability and damage. A commercial auto policy is also known as a commercial auto coverage form (BACF).
Liability is protection against financial loss to your business for injuries or property damage caused by you or your employees while driving a covered automobile. This coverage is regulated by the state and our professional agents make sure you are properly protected.
6.5. Property and casualty
Property insurance is a broad term for a number of policies that provide property protection coverage or liability coverage for property owners. Property insurance provides financial reimbursement to the owner or tenant of a structure and its contents in the event of damage or theft, and to a person other than the owner or tenant if that person is injured on the property.
Property insurance may include several policies, such as homeowners’ insurance, renters’ insurance, flood insurance, and earthquake insurance. Personal property is generally covered by a homeowner's or renters’ policy. The exception is personal property that has a very high value and is expensive; this is generally covered by purchasing an addition to the policy called a rider. If there is a claim, the property insurance policy will reimburse the policyholder for the actual value of the damage or the replacement cost to fix the problem.
6.6. Industrial and operator error
Accident insurance is a broad category of insurance coverage for individuals, employers, and businesses against property loss, damage, or other liabilities. Casualty insurance includes vehicle insurance, liability insurance, and theft insurance. Liability losses are losses that occur as a result of the insured's interactions with others or their property. For homeowners or automobile owners, it is important to have casualty insurance, as damage can end up being a large expense. In addition to automobile and liability insurance, casualty insurance is a general term traditionally used to describe many other types of insurance, including aviation, workers' compensation, and surety.
6.7. Equipment failure
Equipment breakdown insurance, also called boiler and machinery (BM) insurance, provides coverage for physical damage and economic loss due to equipment breakdown. It covers the cost of repair or replacement of damaged equipment and business losses incurred by the non-functioning equipment. Equipment breakdown insurance can cover a wide range of equipment in addition to boilers and furnaces, including elevators and office equipment.
Equipment breakdown insurance protects machine shop owners who may already have standard property insurance coverage on their machines, but do not have insurance coverage for accidents due to operator error. For example, crashes that break an axle or damage the cutting apparatus as a result of a programming error.