Part I of III Masterclass on Raising Debt Capital for your Specialty Finance, Fintech Lending, or Alt Lending Platform
Part I of my Masterclass Series on Raising Debt Financing for Lending Platforms with I-Banker Matt Edgar of Edgar Matthews & Co.
https://assetbacked.transistor.fm/8
Disclaimer: Nothing contained herein is, or shall be relied upon as, a promise or representation as to the past or future. This conversation has been prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Viewers should not construe the contents of this conversation as legal, regulatory, tax, accounting or investment advice or a recommendation. Viewers should consult independent counsel, tax and financial advisors as to legal and related matters concerning any transaction.
A Masterclass in Asset Based Finance Part I of III. Raising Debt Capital for your Specialty Finance, Fintech Lending, or Alternative Lending Platform with Special Guest and Asset Backed Podcast Contributor Matt Edgar, Founder & CEO of Edgar Matthews
Matt Edgar, Founder & CEO of boutique investment bank Edgar Mathews, and I recently finished recording a three episode Masterclass in Asset Based Finance. In recent years, particularly over the past twelve to eighteen months, specialty finance, asset based finance, and different related credit themes have gotten significant attention in the press and from market participants. While this lending has existed primarily within banks and traditional financial institutions for decades, the market is rapidly evolving to include many new market participants.
Matt and I dive into the process of how a growing lending business raises debt financing, prepares to enter the market at various stages of the company life cycle, positions effectively with various capital providers, lenders, and market participants, and more. The first two episodes we believe will be particularly beneficial for startup, emerging, and growth-stage lending platforms and some middle-market originators. Lending businesses and platforms who have achieved a certain degree of scale and desire to diversify their capital sources and partnerships to include the ABS market will find Episode III helpful.
If you are seeking to raise debt facilities, debt financing, or service this part of the credit markets as a lawyer, rating agency executive, banker, SaaS provider, or capital provider, I would welcome your feedback and questions after you listen. Part III will be released soon! Updated as of 9/17/2024.
Listen Here to Part I
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The topics in Part I of III include:
Intro: Firm overview, background, etc.
A broad overview of the capital raising process and how Edgar Matthews works with originators/lenders seeking to raise debt financing
The process for each issuer/lender will differ quite a bit depending on the vertical, stage of the company, collateral, debt solution required, etc. We focus on private ABL facilities more than securitizations in Part I.
Preparing for the capital raising process
Key structural features of warehouse and ABL facilities
Best practices for moving from term sheet to closed transaction
The topics in Part II of III include:
The main structures through which a specialty finance originator can access capital
The different types of investors (or providers of debt capital) that can be approached. Considerations for each cohort of investor.
Key structural features of ABL facilities
Borrowing Base / Advance Rate (also covered previously)
Eligibility Criteria
Excess Concentrations
Minimum Utilization & Accordions
Financial Covenants
Collateral Quality Tests & Triggers
Events of Default
4. The closing and funding process of asset-based financing facilities
The topics in Part III of III include: (Episode coming soon).
1. Biggest mistakes to avoid in the debt capital raising process
2. Biggest struggles for originators when working with investors
3. Advisors and specialists you may want to engage when executing an asset-based financing
4. Key considerations as specialty finance originators evolve and grow and want to tap into the bank, securitization or broader capital markets
5. The current cost of capital and market terms and how this differs by stage and investor type
6. The growth and evolution of private asset-based finance and what we may see over the next 12-18 months