Financing structures and challenges for companies in Germany

2010

The study shows that companies can help optimize their financing terms and structures by using long-term financing strategies. Around half the companies surveyed who focused on long-term strategies said the benefits of these were good terms, a good rating, simplicity, low risk and a trusting relationship with those financing them.

Companies should also base their finance on the particularities of their business models and consider aspects such as business cycles, volatility, risk structure and footprint explicitly. Structured funding increases transparency and allows for more control, making financiers more confident and reducing administrative costs at the same time.

Many of the companies surveyed said bank loans were hard to come by, if they were available at all. So it makes sense for them to use alternative financial instruments to give themselves room to maneuver.

Haghani says, "German SMEs should now review their financial requirements critically – and not be afraid to restructure drastically after overcoming moderate resistance."