Friday, December 18, 2009

Is credit starting to flow?

In the latest McKinsey Quarterly (see link), companies from around the globe are reporting that they are seeking external funds and this demand has increased significantly from previous surveys.

From our own experience we are seeing a strong demand for equity rather than debt.  The benefits of equity are that you don't have to pay it back, and from growing and emerging companies they can then leverage the eqity to obtain debt finance.  Credit still seems to be a problem in Australia and we are seeing a particular shortage for property developments.

We are also seeing a range of off-shore funders willing to invest in both ASX listed companies and public unlisted companies.  Some of the funding models are quite innovative and are relatively simple to procure.

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