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Short & Medium Term Funding

Praxley offers clients an exciting product in the form of Short and Medium Term Funding whereby our clients are able to access Fixed Term Funding at below market rates depending on the credit rating of the client.

This product has evolved largely on the back of the Praxley Group providing transaction advisory and capital raising services to the mid-to-large corporate market over the past fifteen (15) years. During this time, Praxley has assisted numerous South African companies that require funding and has successfully concluded numerous capital raising mandates (see “Salient Success Stories”).

However, what had become evident in recent years is the reluctance on the part of domestic South African banks to accord non-vanilla funding to the mid-corporate-market and even when funding is made available it has often been incorrectly priced or come with onerous conditions and/or security requirements that often to not reflect the risks inherent in the borrowing being sought.

Based on this market trend and the ongoing request by clients to secure funding, Praxley in 2017 commenced with its own non-banking Term Funding product to cater for clients specific and non-vanilla funding requirements.

Arguably the best way to describe this Term Funding Product is to focus on the following three commonly asked questions:

•          How is the Term Funding Product Structured?
•          What is the Purpose of the Term Funding? 
•          Who would the Term Funding Product Appeal To?

How is the Term Funding Structured?

The product is structured on the back of the Praxley Group’s long term relationships with clients (past and present) that are long in cash (the “Lenders”).

These pre-identified Lenders have the ability and a stated commitment to accord fixed term funding to Praxley’s clients that require non-vanilla funding for a specific purpose (the “Borrowers”).  

The Lenders get an above market related rate of return (normally 200 basis points below Prime) while the Borrowers are able to access below Prime funding within 2-3 months.

Pivotal in the structuring of this lending product are the relationships that Praxley has established with global ratings agencies who would provide the requisite rating within six (6) weeks of being approached by Praxley.

The term funding is normally made available 2-3 months from Praxley being approached and mandated by a client.

The minimum term of any Term Loan is twelve (12) months with the maximum term being twenty-four (24) months with the option to extend depending on certain conditions.

The loan documentation and the management of the Term Loans is administered by Praxley.

What is the Purpose of the Term Funding?

The term funding would typically be used by a Praxley client for non-vanilla purposes i.e. not working capital funding, asset based finance or any similar form of funding that can easily be accessed from a bank.

The fixed term funding would typically be accessed by mid-sized companies who require funding of between R100 million and R500 million for a specific purpose.

Who exactly would this product appeal to?

1) Clients that require Acquisition Finance.

2) Clients that require Growth Capital based on increased business activity.

3) Clients that require any form of Bridging Finance.

4) Clients that require any similar form of Non-Vanilla Funding.