Monday
October 2023
Direct contact? Call 073 - 44 00 300 or mail to info@wdl.nl.
Monday
October 2023
A question I'm frequently asked is, "What does WDL look at in a funding request? Which funding request do you reject and which do you go forward with? And what are elements in the analysis you guys do?" In this blog, I list our 9 most important selection criteria.
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?
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?
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?
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.
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?
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?
What other agreements are necessary from the funder’s perspective, such as surety bonds, covenants, etc.?
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.
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!
Contact Bart van der Wielen at 06 38 90 43 36.
Or mail Bart