PMV corporate loans

SMEs and large companies that have:

• an operating office in Flanders and/or provide added value for Flanders

• a track record in generating positive cashflow
• ​a strong position in the market
• an evenly-balanced management team
• a properly substantiated business plan that demonstrated sufficient capacity to repay current and future debts 

The following investments are eligible

PMV Corporate Loans are intended to finance your tangible, intangible and financial investments. They can also be used to fund your operating capital needs linked to the development of your business.

PMV Corporate Loans can also fund the purchase of shares in an existing company or the acquisition of (part of) the goodwill in the company. This type of acquisition may also be part of a family succession within the company, a management buy-out (MBO) or a management buy-in (MBI). PMV supports dynamic, skilful managers in their business endeavours by supporting them financially in taking over other companies. These loans often give a fresh boost to the company and make it possible to implement the strategic choices needed to keep the business growing or – in difficult market conditions – to hold its own in the market.

And if you would like to refinance existing debts over a longer period so that you can retain sufficient working capital to safeguard your continuity and/or growth, then PMV Corporate Loans may offer the solution you are looking for.

PMV Corporate Loans encompass various types of loan that differ from traditional (bank) finance because:

• they have a longer repayment term. These loans run for an average term of 7 years and a maximum of 10
• they are more flexible. This flexibility takes the form of:
  • the option to draw down the loan in one or more instalments
  • dividing the interest rate into a part to be paid in cash and a part that only has to be paid at the end of the term of the loan
  • deferring capital repayments for at least the first two years of the loan, including the option to repay the entire amount of the principal on the final due date of the loan
  • an adjusted repayment amount based on the risk profile of the loan, as defined by the repayment capacity and the ability to establish collateral
  • the possibility to repay the loan early

Other terms include:

• PMV Corporate Loans are for a minimum of €350,000 and a maximum of €5,000,000
• the repayment of PMV Corporate Loans consists of an interest rate payment in line with the market, part of which is to be paid in cash and part is deferred for payment on the final due date of the loan
• PMV Corporate Loans only provide part of your total funding needs and are always issued as part of a co-financing arrangement with banks, shareholders, managers, financial investors, etc.

PMV Corporate Loans can be both subordinated and non-subordinated.

Subordinated loans, also called mezzanine financing, are ranked after bank or other finance. This means that should the borrower go bankrupt, the subordinated loan can only be repaid once the bank or other finance has been paid back in full. Subordinated PMV Corporate Loans combine the elements of a loan, such as a fixed repayment term and a fixed interest rate, with those of a capital injection, specifically permanent financial resources designed to strengthen the company’s equity capital and solvency. The subordinated nature of these loans mean that they carry a higher risk.

Non-subordinated PMV Corporate Loans are loans that carry a lower risk because they:

• give preference over subordinated debts in the event of the borrower going bankrupt; and/or,
• are guaranteed by specific first or second-grade collateral, whether or not on an equal footing with the banks; and/or,
• are subject to covenants. These are conditions that the borrower must comply with, such as providing financial information adhering to financial ratios.

The interest rate on non-subordinated PMV Corporate Loans is lower because the risk is not so high. They provide an additional form of finance with longer terms than traditional bank finance, which always continues to provide a minimum of 50% of the company’s overall funding needs. The company bank also remains the point of contact for other financial services, such as cash management, insurance, property management, factoring, leasing, etc.

• Deductibility of the interest rate payments from the taxable profit (in contrast with dividends)
• No threat to the existing relationship with your company bank (everything stays the same)
• Cheaper and simpler than capital
• The maturity date and cost of the loan are known from day one
• Strengthening of equity capital (with subordinated loans), without any solution in the shareholding
• Leverage for bank finance and other forms of funding
• No interference with the (day-to-day) management of your company
• The decision-making process is clear and efficient
• PMV acts as a sounding board for the business, providing financial and operating experience