In a changing financial environment, Italian SMEs are exploring alternative instruments to bank credit, such as minibonds, with increasing interest. These private debt instruments offer companies the opportunity to access fresh capital by issuing debt securities, without diluting the share capital. But what characteristics must a company have to make the most of this opportunity?
1. Solid growth prospects
A company's economic stability and growth prospects are prerequisites. Although it is not necessary to have impeccable balance sheets, ideal companies must demonstrate sufficient capacity to generate cash flow and a controlled level of debt. This gives investors confidence that the company is able to meet its commitments over time, reducing the risk associated with the investment.
2. Company size
Although minibonds are designed for SMEs, it is essential that the company is of an appropriate size to justify the issue. Generally, companies issuing minibonds have an annual turnover of more than EUR 10-15 million. This threshold is not rigid and varies according to the economic environment and sector of the company, but serves as an indicator that the company is sufficiently structured to support a minibond issue.
3. Transparency and Governance
Transparency vis-à-vis investors is crucial. Companies must be able to provide detailed and accurate information on their financial performance, growth strategies and use of the funds raised. In addition, good corporate governance is essential to gain the trust of investors. An independent board of directors and the adoption of rigorous reporting practices are elements that can enhance the perception of trustworthiness.
4. Sound Investment Design
The issuance of minibonds must be supported by a clear and solid investment project. Investors want to know exactly how the company intends to use the funds raised, and prefer to invest in companies that plan to use the capital for growth projects, such as market expansion, strategic acquisitions or technological innovation, rather than for debt restructuring.
5. Rating and Credibility
Having a credit rating, although not mandatory, can significantly increase the attractiveness of a minibond. The rating provides an independent assessment of the risk associated with the investment, offering more security to investors. Companies with a good credit rating are more likely to attract investment on favourable terms.
6. Ability to Relate to Investors
Finally, the ability to establish and maintain relationships with investors is crucial. Companies must be prepared to interact with institutional investors, answer their questions and provide regular updates. This ongoing communication is vital to build trust and maintain good relationships, which are essential for any future issues.
Conclusions
Minibonds represent an attractive opportunity for medium-sized Italian companies wishing to diversify their sources of funding. However, to make the most of this instrument, companies must demonstrate potential for economic growth, transparency, good governance and a credible investment project. With these characteristics, minibonds can become an important pillar in a company's financial strategy, helping to support growth and innovation.
For more information on opportunities to issue minibonds through our platform, please contact us.