In the finance profession, we love puzzles!

• Investment and financing plan

  The logic of the investment and financing plan. Does it make sense what the funding is for? You can often tell quickly when it is not. For example: Has transfer tax been added? Does the acquisition of that company include sufficient working capital?

• Legal structure

  What is the overall legal structure and with what activities and assets belong? And which legal or natural persons are liable for the financing? And is it logical given the activities, investments and cash flow needed to provide the financing?

• Market

  What market is this company in? Do we understand that market sufficiently? How are market forces running? And what are the elements in the market that can make and break the company?

• Organization

  How is the organization of the company structured? We always create a good picture of the business processes, revenue models, departments, key employees, FTEs, locations, etc.

• Interest and redemption

  Can the potential borrower pay his interest and principal? What is that lease like? Is this tenant financially solid? What was the borrower’s cash flow like historically, but more importantly, what will that cash flow be like in the future post-investment? How much room is there for setbacks?

• Collateral

  What collateral can the company provide for the lender? For example, is there a mortgage on a property? And what is the value and quality of the property? Are 1st pledges possible?

• Other appointments

  What other agreements are necessary from the funder’s perspective, such as surety bonds, covenants, etc.?

• Knowledge and experience

  Have we looked the relevant (real estate) entrepreneur in the eye and is this person reasoning realistically based on proven knowledge and experience? So not everything too positive, but certainly not too negative either.

• Investment Policy

  Do we manage funds where this funding fits the fund’s investment policy, or do we have investors who want to funnel this one-on-one?

I could talk about each point for a whole day, but yes, we have to move on! On to the next funding request. What a fun puzzle this is every time and what a top-notch profession we have!