Cashflow Lending
Senior Debt Within Structured Funding Solutions
Cashflow lending is commonly used as part of a broader funding structure to support acquisitions, growth or strategic investment.
Facilities are typically structured against sustainable cashflow rather than specific assets. Lenders assess them on profitability, stability and debt service capacity.
How Cashflow Lending Is Used
Cashflow lending is most often used to:
- Fund acquisitions and management buy-outs
- Support growth and expansion initiatives
- Provide term funding alongside working capital facilities
- Refinance or restructure existing debt
Typical Structure
While each transaction is assessed on its own merits, cashflow facilities commonly involve
- Senior term loans, secured or unsecured
- Facilities with or without personal guarantees
- Leverage typically ranging from 2x to 4x adjusted EBITDA, subject to lender criteria
- Covenants aligned to cashflow performance
Our role is to advise on appropriate leverage, covenant structure and lender selection.
Advisory Considerations
When advising on cashflow lending, we focus on:
01.
Sustainability of debt service post completion
02.
Covenant headroom and downside resilience
03.
Alignment between lender expectations and business strategy
04.
Interaction with other funding facilities
Relationship to Other Funding Solutions
Cashflow lending is often structured alongside:
- Invoice finance to support working capital
- Asset-based lending in more complex transactions
- Asset and equipment finance for capital expenditure
We advise on the most appropriate combination based on the transaction context.
