Finance for Business Growth
What is SME
Micro
Turnover
Sector
Services
Manufacturing
Trading
Source : Dubai SME
Employees
Small
Turnover
Employees
Medium
Turnover
Employees
What is SME
Sector
Medium
Turnover
Employees
Micro
Turnover
Employees
Small
Turnover
Employees
Services
< = 3 mln
< = 20
< = 25 mln
< = 100
< = 150 mln
< = 250
Manufacturing
< = 10 mln
< = 20
< = 100 mln
< = 100
< = 250 mln
< = 250
Trading
< = 9 mln
<=9
< = 50 mln
< = 35
< = 250 mln
< = 75
Source : Dubai SME
Life Cycle – Business Finance
IPO/
M&A
IB/ PE
• Investment Banks
• Private Equity
• International Bank
Syndication
• Bonds
• IPOs
VC
Seed
Capital
•
•
• Personal Savings
•
•
• Borrow from Friends
•
/ Relatives
•
•
•
•
Private Equity
Sell Out
IPOs
M&A
Internal Accruals
Further equity
Bank Finance
Venture Capital
PE with SME Focus
• Angel Investors
Start up
Growth
Maturity
Exit
Growth Finance
Internal
Accruals
Private
Equity
Funds
with SME
focus
Further
Equity by
Owners
Venture
Capital/
HNI
Investor
Bank
Finance
Financial
Institutions
Finance
Bank Finance
Statutory Warning!!
Bank
Finance
Financial
Institutions
Finance
XYZ
Bank $
Bank Finance – Options
Bank
Finance
Financial
Institutions
Finance
•
Business Loans
•
Personal Loans
•
Loan against POS
•
Loan against Assets – Vehicle, Commodities, Property, Deposits
•
Commercial Property Loan
•
Equipment Loans – Commercial vehicles, medical equipment, construction
equipment
•
Working Capital Loans – Overdraft Facilities
•
Trade Facilities – LC / TR
•
PDC Discounting / Invoice Discounting / Export Bills Discounting
•
Term Facilities
•
Non-funded facilities - Bank Guarantees / Bonds
Bank Finance – Case Study
Bank
Finance
Financial
Institutions
/ Finance
Industry : Oil & Gas
Ideal Way to Grow
Year
Activity
AED mln
No Longer SME
2010
2011
Trading
2012
2013
40
1
90
3
164
6
307
12
450
32
600
42
1000
70
Internal Accruals
Equity
Net Worth
1
2
3
4
4
8
10
6
16
22
11
33
54
11
65
96
11
107
166
11
177
Facilities
Number of Banks
Average Facility Size
Type of Facilities
5
0
0
40
6
7
73
10
7
Turnover
Net Profit
20
4
5
LC/TR/OD
2014
2015
Trading & Manufacturing
2016
113
150
250
12
10
9
9
15
28
LC/TR/OD & Medium Term Facility
Bank
Finance
Bank Finance – Case Study
Micro SME
Industry : Health & Wellness
How a Micro SME can fund itself
Financial
Institutions
/ Finance
Year
Activity
2011
2012
Figures in AED
2013
Services
2014
2015
Turnover
Net Profit
627,505
31,140
2,002,286
340,983
2,471,801
333,062
3,132,766
850,000
3,500,000
945,000
Net Worth
476,361
698,488
465,153
1,315,153
2,260,153
Facilities
Number of Banks
Average Facility Size
Type of Facilities
0
0
-
0
0
None
-
0 2,000,000
0
3
666,667
Business Loan
Commercial Property
Venture
Capital/
HNI
Investor
Private
Equity
Funds
with SME
focus
Equity Finance
SME
Statutory Warning!!
INVESTOR
Equity Finance – Considerations for Investors
Venture
Capital
Private
Equity
Funds
with SME
focus
•
Owner Profile
•
Management Team
•
Governance Structure
•
Product / Business - Lifecycle
•
Market Potential
•
Revenue Potential / Profit Potential
•
Scalability of Business
•
Uniqueness of Business / Competitive Advantage
•
Systems and Processes
•
Risk Factors
•
Competitor & Customer Profile
•
Investment Needed
•
Valuation of Business
•
Planned Use of Proceeds
•
Exit Strategy
Growth Finance – Case Study
Venture
Capital
 Industry - Guest Room Technology Products and Solutions, catering to Hotel and
Hospitality Sectors.
 The company is a Zero Debt, Cash Flow Positive company, has grown its top line at
a CAGR of 9% with an estimated CAGR growth of 52.7% in the next 5 years
Private
Equity
Funds
with SME
focus
 Achieved an EBITDA margin of 13.5% & Net Profit margin of 11.3% in 2013
 The company expects to grow top line from the current $1.83M to $15M in 2018
with net profit increase from $207K to $4.5M
Revenue-EBITDA performance
2010-2013
Figures in ‘000 USD
2010-2011*
2012
2013
Revenues
1,556
2,158.09
1,833.52
COGS
1,108.68
1,320.04
1,138.55
Gross Profit
447.32
838.05
694.97
Operating Exp
1,561.8
794.50
447.12
EBITDA
(1,114.48)
43.55
247.84
Net Profit
(1,167.63)
7.05
207.31
*2010-11 period is for 18 months and the opex includes one time
set up cost of $750,000.
GIC is raising USD 1.5 mn
Equity from an HNI / Venture
Capitalist for the Company
‘‘Always remember, the human mind, once
stretched by new ideas, never returns to its
original state, it keeps growing’’
His Highness Sheikh Mohammed bin Rashid Al Maktoum
About Us
What we continuously aspire for…
Our Vision
To be a preferred solutions provider to our clients and be a long term partner in their success
by enhancing their performance and setting a benchmark of excellence
What we offer…
Solutions Framework
Management Solutions
 Process Re-engineering
 Process/ Accounting/HR manuals
 Organization Restructuring
 Business Strategy
Financial Solutions
 Fund Raising Solutions
Project Finance
Trade Finance
Working Capital Finance
Real Estate Finance
Angel Equity
Private Equity
Finance on pledge of shares
Insurance Solutions
 Medical Insurance
 Life Insurance
 Fire Insurance
 Motor Insurance
 Marine, Hull Insurance
 Financial and Business feasibility
 Budgets and forecast systems
 Cost reduction
 Financial feasibility
 Third Party Liability
 Financial re-structuring
 Professional Indemnity
 Financial appraisal
 Post Transaction integration
Thank You
www.investgic.com
rajiv@investgic.com
050-8846602
*