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Innovative Financing
The future of the sustainable energy market.
Financing growth is a major challenge for many SMEs. The upsurge in renewable energy — according to the UN conference “COP-28” in Dubai in December 2023, is intended to drive the transition away from fossil fuels and triple the output of renewable energy by 2030. This will have to result in appropriate investments globally. In Switzerland, an amount of around 150 billion CHF is expected by 2050.
The challenges
of Swiss SMEs
The primary problem that companies in this sector have to overcome is the shortage of skilled workers. In addition to digitization, this will soon be followed by the challenge of financing.
In the past, SMEs received at most mortgage loans on their properties, but Energiewende SMEs now need growth loans, as they are being forced by the market to expand with appropriate pre-investments due to increased demand.
This will become even more pronounced in the coming year. The dialogue with the house banks on this issue is laborious and difficult for many SMEs, and we can help with this as part of Climartis AG.
Our Prerequisites
Before the question of financing, the following points must be answered positively:
Available Growth 5 - 15%
EBITDA margin 10 - 15%
Positive free cash flow
If these points can all be answered in the affirmative, the business should also be able to utilise outside capital. Always to a reasonable extent: world-famous investor and main shareholder of Berkshire Hathaway, Warren Buffet, on the right in the hexagon:
Our diverse financing solutions:
Optimising the acquisition process
We offer a variety of financing options for corporate takeovers.
Classic financing
We implement sustainability on a national level by actively supporting the Swiss energy strategy and aligning our corporate goals towards a sustainable future.
Acquise loan
Many banks offer financing to buy companies, provided that they have a healthy company structure and a corresponding profitability. Depending on the situation, bank pre-financing can be achieved, which is then repaid over the years from cash flows/dividends.
Je nach Situation kann dabei eine Bank-Vorfinanzierung erreicht werden, die dann über die Jahre aus den Cashflows/Dividenden zurückgezahlt wird.
Seller loans
In addition to acquisition loans from banks, some also work with guarantees or seller loans. This instrument allows, firstly, to increase the affordability of the takeover and also often testifies to the quality of the acquired company, otherwise sellers would not want to give out an interest-bearing loan in return.
New, innovative financing options
Thanks to our experience in financial management of even larger multinational companies (our founder Samuel Hügli was group CFO at Ringier AG with 12 regional branches and around 8000 employees), we are also able to break new ground here together with our subsidiaries. These include, for example, the following elements:
EBITDA/cash flow financing
Future cash flows are brought into a reasonable, sustainable relationship for the bank — using so-called “covenants” or credit conditions in German. For example, the debt must not be higher than 3xEBITDA or the interest burden must not be higher than *EBITDA
Capital increases
After a certain maturity, the holding company can raise money in the form of equity through a capital increase (in contrast to selling shares, the capital increase serves to expand the company organically and inorganically, i.e. no shares are sold, but only new shares are created, diluting existing shareholders.
Other innovative forms of funding
There are also a number of other innovative forms of financing, such as peer-2-peer financing, mezzanine or convertible loans, direct debt issuance (green bonds), revenue financing or equity placement.
We are discussing this with a number of partners - here is a selection:
The future of financing
One topic that we will be offering soon is the financing option for the purchase of heat pumps or other elements that belong to an energy-autonomous building — such as solar systems, batteries, charging stations, etc. We are developing appropriate solutions with local banks and P2P lending platforms.
In doing so, we want to offer a digital “user journey” without barriers and with the integration of the various providers on one website — right through to financing.
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