What is Debt Advisory?
The term ‘Debt Advisory’ is used by a variety of professionals and businesses, however many individuals still don’t really know what it is. This is because each profession tends to take a different stance on its’ definition of Debt Advisory as a service.
Generically speaking, Debt Advisory is where a profession, whether it be a lawyer, finance broker, accountant, financial advisor, property consultant etc. supports a borrower through some elements of, or through a total lending transaction. The types of transactions this can include are;
Raising finance to acquire property(ies)
Raising finance to support business growth
Accessing equity investment for growth or acquisition strategies
Refinancing existing debt facilities or accessing new debt products
Realising value through debt restructuring
General advice and capital raising in financial stress situations
Often the professions that offer Debt Advisory as a service, only involve themselves in the introductory stage of a lending transaction. For example, a finance broker or financial advisor may only refer the borrowing request to their pool of trusted lenders, leaving the co-ordination of their request to the client.
However, a Debt Advisory service should be much more than this. It is about supporting the client through every element of their borrowing request from start to finish.
This begins with understanding the clients, their business and personal goals. Once this is established then the advisor can search for appropriate funders, obtain deal structure and pricing indications, gain credit approval, co-ordinate professionals, eg lawyers, accountants, valuers and contractors, and arrange the discharge of lending conditions and covenants to enable draw-down and completion.
A debt advisor will co-ordinate every element of the transaction to relieve the stress, time and burden from the client.