Participation: Surrendering rights for liquidity
You can raise liquidity by means of a third-party investment in the rights to your company. This is formally an increase in equity from outside. When you bring equity capital into your company, you also share the corporate risk with the capital providers; however, you also share the earnings in proportion to the capital shares. …
Financial Investment by Private Equity Firms
Private Equity Firms invest in companies in order to expand their portfolio and generate cash from the return on your company. They are usually involved as pure financial investors, less frequently as strategic investors. You cannot expect every private equity company to provide operational support for your business. Often they lack the technical and industry …
The strategic corporate investment simply explained
Business groups are sometimes created under the strategic leadership of a holding company that acquires stakes in strategically suitable companies. Such holding companies derive value from the strategic positioning of their group of operating companies. Some holding companies tend to be centrally managed, while others give their operating companies considerable entrepreneurial freedom. In some groups, …
Waiver of creditors’ claims as a rescue
In an economically difficult situation, means may be resorted to that are beyond the realm of the imaginable under normal circumstances. One such means is asking creditors to waive claims as a restructuring contribution by the company itself. Such a step can be successful if all creditors are included in the financing. If the creditors …
Determinants and Effects of Credit Ratings
Commercial banks pay attention to the creditworthiness of the applying companies when making credit decisions. A prerequisite for improving creditworthiness is to understand the influencers of credit ratings. It is also important for companies to know the effects of credit ratings.
Determining Credit Ratings
Lenders, especially commercial banks, to whom you apply for a loan first find out about your creditworthiness. They assign their debtors a credit rating based on a combination of an internal scoring procedure and an inquiry with a credit agency. Banks keep the specific criteria and their weightings secret. However, there are certain indications of …
Effects of Credit Ratings
Credit ratings have a significant impact on credit opportunities and costs. If the creditworthiness is insufficient, there is no confidence in the borrower. An application for a loan is then rejected. However, most credit institutions seek discussions with applicants to explain the reasons for the rejection and to show them ways in which they can …
Crisis & rehabilitation: Master every economic challenge
Economic crisis situations are a special facet of management. They present managers with very different challenges than “normal” day-to-day business. Some crises arise acutely from changes in the general conditions. Example: A food supplier to a large discounter is faced with the short-term choice of further reducing its prices, which are already close to the …
Candidate Interviews and Selection Criteria
Think of interviews as both sides getting to know each other professionally. Today, qualified and experienced employees usually have several options. Asking for qualifications does not work. During the interview, try to confirm by example the extent to which the skills and interests listed in the application materials actually exist. If a candidate has written …
Optimal onboarding processes
Because recruiting high-potential employees is so difficult, lengthy and cost-intensive, every effort should be made to retain good, new employees and bind them to the company. The introductory phase is particularly critical. A proven tool during this start-up phase is a solid onboarding process. Don’t leave new employees on their own. Provide them with a …