Extended capital-markets CFO
Compare what the business receives, what it must pay, which rights it gives up and what can prevent closing. A proposal with the lowest rate may deliver less usable cash or constrain a planned sale. Put the current bank or cash alternative on the same page. The result should be a recommendation, not a list of financing products.
Normalize the economics
Use the same asset scope, funding dates and comparison period. Show gross funding, required payoffs, fees, reserves and net cash available. Include all scheduled payments and any final balance or purchase obligation. ELFA provides questions to ask about financing terms; complete schedules matter more than a headline factor.
Market reference: ELFA: questions to ask before financing equipment.
Separate price from flexibility
List collateral, guarantees, reporting requirements, financial covenants and restrictions on distributions or asset sales. Model the likely business exit as well as a hold-to-maturity case. A proposal that prevents an important acquisition or equipment replacement may have an economic cost the interest rate does not reveal.
Identify conditions to execution
Record which numbers are firm, indicative or assumptions. Ask what still depends on credit approval, appraisal, legal diligence, landlord consent or market conditions. Note expiry dates and deposits. Institutional and asset finance products have different structures; a provider description is not a commitment for this borrower.
Market reference: MetLife Investment Management: private debt.
Write the decision in plain language
State the preferred option, the reason, the main downside and the fact that would change the recommendation. Assign owners to unresolved terms. An independent review may conclude that the existing bank proposal is best. More providers are useful only if the comparison or execution prospects improve.
Illustrative example, not a client result
The decision in practice
Offer A has a lower spread but requires a larger reserve and a restrictive exit payment. Offer B costs more annually but fits a planned business sale. Comparing net cash, exit economics and consent rights can reverse the ranking suggested by the rate alone.
What to prepare
- Complete proposals and current funding alternative
- Expected holding period and key business constraints
- Payoff, tax and accounting inputs confirmed by the relevant advisors
For an initial conversation, a summary is enough. Share private materials only through an agreed channel.
Common questions
How many proposals do we need?
Enough credible alternatives to make the decision. A large collection of noncomparable indications can create work without improving the outcome.
Does CFO Signals select the cheapest lender?
We help compare the full tradeoff. Cost matters alongside proceeds, certainty, flexibility and fit with the business.
Sources and further reading
Our decision framework is CFO Signals analysis. External references describe market practices and products, not an endorsement, partnership or available offer. Terms and eligibility require confirmation for your transaction.