Interest rates and raising money
Recent discussions in the media show surprise that the Reserve Bank reduced the Official Cash Rate to 1%, a record low, and raise the question - how much further can this go? And what would be the implication of negative interest rates? Well I’m not going to go there!
Recent discussions in the media show surprise that the Reserve Bank reduced the Official Cash Rate to 1%, a record low,
and raise the question - how much further can this go? And what would
be the implication of negative interest rates? Well I’m not going to go
there!
But here’s a view in an article from Newshub, a report from Stuff.co.nz, and an excellent commentary from David Hargreaves - who reflects on the fact that “exactly
11 years ago, in 2008, you could, according to Reserve Bank figures
have invested in a six month deposit yielding in excess of 8%”.
Of more interest to me is the May 19 paper from Business New Zealand,
which reminded me of the changes that have taken place in obtaining
loans and the opportunities these now presents. And how does this also
affect the ability to raise capital?
These are high level observations from over 40 years in the business,
and cannot be taken as advice. But if you’re interested in further
discussion contact call me on 021 902 901 or email me at john.paine@tbkcapital.co.nz.
Raising money
Readers who also subscribe to my Newsletters may have already seen my paper on the debt option available.
So I thought it might be useful to indicate to you some of the key
questions potential borrows (or owners seeking equity partners) need to
answer.
Businesses
- How much money are you looking for?
- Are you seeking equity or debt or don’t you know?
- How much capital/money do you have to contribute to whatever you want to do?
- Are you simply looking for money to buy a business or to expand/improve an existing business?
- How long has this business been operating?
- Does the business own the premises from which it operates? If so is the underlying land freehold or leasehold? Do you have a valuation of the property?
- What does your current business balance sheet look like?
- What do the last 3 years’ P&L accounts look like?
- What are the next 3 years’ financial projections? Preferably monthly for the next year and annually thereafter.
- How much money are you looking for?
- Are you seeking equity or debt or don’t you know?
- Is this just a loan with property as security to raise money for something else, if so what?
- How much capital/money do you have to contribute to whatever you want to do?
- Are you seeking to simply buy an existing property or to expand/improve it?
- Is the property zoned rural, residential or commercial/industrial?
- What is the current valuation of the property?
- What will the (estimated) valuation be when you have finished your subdivision, build, refurbishment or whatever?
Of
course these are just the high level questions that need to be
answered. And you may not have the answer to some – like the current
valuation of the existing business or property. But once we have the
basis of what you have now, and what you want to achieve, we can work
with you to clarify your objectives.
Note our fee structure is highly success based, with up-front fees only
to commit to, structure, document, and manage the request. We will quote
you on these before proceeding.
Want to Know More?
If you’d like to know more, email me or give me a call on +64 21 902 901
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The above investment is not an offer of financial products that
requires disclosure under the Financial Markets Conduct Act 2013 (Act)
and is available only to wholesale investors as defined by that Act. It
is intended for distribution only to selected people to whom, under the
relevant laws, it can be lawfully distributed. It cannot be distributed
in any other jurisdiction, or to any other people. It is not an offer or
solicitations in any jurisdiction in which such offers or solicitations
are not authorised, or in which the person making such offers or
solicitations are not qualified to do so, or to any person to whom it is
unlawful to make such offers or solicitations. Any representation to
the contrary would be unlawful. No action has been taken by any person
that would permit a public offering in any jurisdiction where action for
that purpose would be required.
Cheers
John Paine B.Sc., Dip BIA
TBK Capital Limited
Level 10,120 Albert Street
Auckland 1010, New Zealand
Phone +64 9 307 3257
Mobile +64 21 902 901
Email john.paine@tbkcapital.co.nz
For more information, please click the contact button below to send us a message.
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