The Corona virus came and caused havoc around the world resulting in economies having to balance social and economic impact. Businesses have been forced to close, people have lost jobs, negatively impacting their livelihoods and economic activity around the world suffered a major downturn. The effects of the pandemic are expected to continue for the near future.
Many businesses that are still managing to keep their doors open are finding it challenging to manage business liquidity such as operational expenses and working capital because of the pandemic, with limited options for financial relief. Private equity offers a solution to this liquidity crisis, effectively being a partner to help you through this tough time so you can come out the other side stronger.
Businesses across the globe have benefitted from a private equity partnership and have made huge strides to greater success, albeit the current economic headwinds brought on by Covid-19. Traditional commercial financiers are facing challenges with default rates at an all-time high and with many businesses who are applying for credit facilities facing liquidity challenges. This makes lending very difficult with stricter approval measures and less flexible repayment structures.
A private equity investment will provide you with capital that is more patient in nature and requires no fixed repayment term or monthly repayments, allowing you to restructure your capital and settle your debt while taking advantage of growth opportunities in very difficult market conditions. You will have access to immediate cashflow that will give you the peace of mind to focus entirely on growing your business to its full potential.
Some private equity firms, such as Eos Capital, have world class experts that will get involved in your business, using their skills, expertise and networks to assist you in growing your business. You will have access to an ecosystem of businesses with whom to explore synergies and get support from. This value add will prove invaluable in assisting you to make key business decisions, recruit a high-performance team and develop effective business strategies, allowing you to reach your full potential.
There is no need to give up control in such a partnership. A private equity fund can come in as a minority or majority investor. The fund is a partner, not a new boss and will work together with you to grow the business. You might feel like you are selling your business for too little now if you can see the huge future potential. The question to ask is whether more of that potential could be reached with additional patient equity capital and more expertise and support. If yes, then the size of the pie will be bigger for all parties in the future and your piece of the pie will be bigger than if you had gone it alone. This is the benefit that a private equity partnership can bring, amidst the havoc that the Corona virus is causing.