The reasons for which small and medium-sized entities (SMEs) – even those with a high creditworthiness – have themselves rated are changing. At least this is the personal experience of Hans J. Loges, expert and managing director of the Rating Services AG. „There are particular financing needs which nowadays prompt companies to undergo a rating.” According to him in previous years companies got themselves rated in order to improve their marketing and sales position or in order to be better prepared for an internal bank rating prior to the granting of a loan.
Chief analyst Dr. Maria Zeller sees another reason for the above-mentioned development in the eased conditions of accessing equity capital: “Whereas in previous years Mezzanine capital owners applied very high standards and required an outstanding rating of at least BBB, they nowadays accept a BB rating.” This encourages always more solid small and medium-sized entities to look for bank-external ways of financing such as Mezzanine financing and undergo a rating to this end.
A recently published study conducted by the chair for finance and banking at the Augsburg university came to the same conclusion. An ever increasing number of companies realize that apart from traditional bank loans they also have to make use of complementary financing methods such as Mezzanine funding, private equity, venture capital or leasing and factoring in order to put their finances on a solid basis. Thus, according to Mr. Loges, ratings as a classical means of the capital market are also gaining an ever increasing importance to SMEs which want to improve their financial situation. By using the right mix of complementary financing instruments companies could optimize certain financial ratios, increase their creditworthiness and attract additional capital owners.
MittelstandsBlogDokument 0614 on the subject of “Financing alternatives for SMEs�? (27-page PDF brochure, approx. 1MB, for Download) )