Discover how the FirmFunding platform enables the connection between SMEs and investors.
Financing by private debt, still too little used by SMEs, is nevertheless an unavoidable source of financing within ETIs and large groups for several years. Provided that relatively simple eligibility conditions are respected, the bond allows indeed to reinforce the quasi equity of the company while not diluting the founder's share in the capital and this, while preserving the cash flow of the SME, since the repayment of the principal takes place in fine. Private debt is therefore a means for the company to diversify its sources of financing, in addition to bank financing. This attraction for bond issues is also seen on the investor side: there has been a marked increase in the creation of debt funds, which allow financing professionals to offer their financial and technical expertise to the SMEs in which they invest through this medium- to long-term investment.
It is to bring together these two worlds, that of the company and that of professional investors, which too often do not meet each other, that the FirmFunding platform was created: to give SMEs access to this mode of financing too often reserved for large groups.
How to use the platform.
Fostering contact between investors and entrepreneurs
The process of putting a financing file online has been simplified as much as possible to save time for boards and investors. First important aspect, the FimFunding platform is intermediated: SMEs cannot register directly, it is their advisors, specialists in equity financing (equity advisors, accountants, lawyers, ...) who are the privileged interlocutors of FirmFunding in a first step, and in a second step, investors. These advisors, after registering as such on the platform (name, Siret, validation of the T&Cs), can begin to put their client's file online.
Beyond the minimum legal information on the SME (company name, location of the registered office, Siret, activity...), specific information relating to the financing project itself must be added, likely to inform investors about :
- the purpose of the financing project (development, growth, transmission,...?)
- the typology and characteristics of the loan envisaged (full equity, full bond, equity/bond mix? duration? rate?)
- the company's ability to redeem the coupons and then, at maturity, the principal, with the available cash flow.
For this purpose, boards are asked to fill out standardized documents developed by FirmFunding, Info Memorandum and Business Plan. Any additional documents deemed useful and relevant, highlighting the project and the company, can of course be added. The FirmFunding teams, after having reviewed these documents and, if necessary, given advice on their presentation and drafting in order to meet investors' expectations, validate the online publication of the file.
A secure investment platform dedicated to investors
Once online, the financing project is visible to the professional investors registered on the platform, i.e. more than 200 investors, mainly debt funds (management companies), but also family offices and qualified individual investors; all investment strategies (sectoral, regional, more or less long term, ...) are thus represented, offering the maximum chances for the financing projects put online to find takers. Investors can find out about the financing project by logging on to the marketplace, investment platform which offers a standardized and didactic presentation of the files; they can thus immediately identify whether they are likely to meet their investment criteria. Investors can manage their personal space as they see fit, filtering the files and classifying them into preferences. The contact details of the company's board of directors are directly accessible, so that they can be contacted immediately. Further exchanges and due diligences are carried out according to a classic process, outside the platform.
Digitalized, accelerated and facilitated private debt financing for SMEs
The FirmFunding platform, at the end of a totally digitized process of putting on line and consulting the files, allows the connection of entrepreneurs and professional investors and maximizes the chances of finding financing for SMEs:
- It represents a precious time saving for business consultants, who avoid the time-consuming but obligatory step of making individualized contacts with investors likely to be interested in their clients' financing project. All investors are immediately notified when the project is put online and can contact the consultant if the financing project is likely to meet their investment criteria.
- It allows investors to access files according to a standardized presentation, providing them with key information that is crucial for them (amounts, types, sectors, regions, etc.), and guaranteeing a minimum quality of content.
- It is a closed platform, guaranteeing the maintenance of confidentiality: its access is restricted to registered professionals who have made a strict commitment of confidentiality. If the boards do not wish all investors in the database to have direct access to the documents, they have the possibility to control access and to anonymize the documents put online.
- The process is fast and efficient: a 2-month investment is sufficient to « survey » the entire investor base and to have the necessary contacts to success of the financing operation.
This is the DNA of the FirmFunding financing platform: to put digitalization at the service of entrepreneurs so that they can find investors to support them in their development projects, and thus promote the financing of SMEs. FirmFunding, the first and only platform dedicated to private debt investment, allows, at the end of a simple, fast and secure process, the connection of SMEs and investors, and the former to grow, and the latter to invest their funds in accordance with their investment policy.