Investor advisor - The point of view of Jean-Luc Bertrand,
Partner at ONEtoONE Corporate Finance
Can you introduce us to your company OneToOne ?
We are the French subsidiary of the international M&A and corporate finance consulting group OnetoOne, which has a hundred partners in some twenty countries in Europe, Latin America, Asia, China and India. We are involved in all types of transactions such as disposals, transfers, acquisitions, external growth operations or fundraising for expansion capital projects, LBOs, OBOs, MBIs or capital restructuring, with a very strong focus on cross border transactions. Out of some forty deals in 2019, half were carried out with companies outside France involving OnetoOne teams of different nationalities. Many of us are former company directors, which allows us to be close to the bosses of the SMEs we support, as we have been confronted with the same issues. Translated with www.DeepL.com/Translator (free version)
Why did you choose private debt to support SMEs ?
It is difficult to propose an external growth operation and not know how to finance it. To finance a project or the development of a recent company that is not yet eligible for conventional debt, there can be a whole range of tools, in which private debt has its place. Of course, a capital increase can be made, but this creates dilution and we must try to limit it. This equity injection can be usefully supplemented by private debt and traditional senior debt. Depending on the seniority of the company and the structure of its balance sheet, it will be up to us to recommend the optimal financing in which private debt has its place. Translated with www.DeepL.com/Translator (free version)
What is OnetoOne's contribution when its SME customers have recourse to private debt ?
Until now, private debt was reserved for large groups, and even today few SME managers are familiar with this means of financing. Yet they could find many advantages in it. Starting with the advantage of bringing in additional cash without losing control of the company. This loss of control is often the red line that will slow down the development of an SME's international projects. We can resort to traditional debt, but for SMEs we quickly saturate the lines. As long as companies have significant working capital needs, traditional bank financing will be used to finance operations. Translated with www.DeepL.com/Translator (free version)
What is the advantage of using private debt financing ?
Each project is unique and not all are eligible for private debt. Of course the cost is much higher than debt and the returns are much lower than what an investor could expect compared to an equity investment. Private debt is therefore an excellent tool to be included in the range of possible financing for SMEs, and it is to be welcomed that SMEs can have access to this form of financing.
How can a platform like FirmFunding help the development of this market ?
There are two areas where FirmFunding brings a real plus. First of all it is a new tool, which corresponds to new players that we don't necessarily know, and who don't know us either. However, all financing requires mutual trust. Going through this platform helps to establish this trust. Going through a platform also makes it possible to reach many players simultaneously for the same project, even if they are located abroad. This platform will also reassure them about the seriousness of the projects. It saves time for the financial advisor and is a guarantee of seriousness for the investor.