Corporate Finance
March 11, 2024
5 mins

What Is Corporate Finance?

Martin Dean FCCA

Ever wondered how to take your business to the next level? Maybe you're considering selling your company or need funding for growth. This is where Corporate Finance advisors come in.

But what is Corporate Finance? Don’t worry, you aren’t the only one asking that question! There’s often confusion with the term Corporate Finance and the type of work involved that Corporate Finance advisors do, particularly in the SME space.

So what types of work require usually Corporate Finance advice?

There are 4 ‘main’ areas where a Corporate Finance advisor is needed.

Business Valuations – Corporate Finance advisors are usually involved in Business Valuations, often needed for a variety of reasons; Business owners looking to sell or buy other businesses need an assessment of what their own business is worth or the business they are looking to acquire is worth. Business Valuations are also needed for various employee incentive schemes and other tax planning opportunities e.g., EMI share options, company de-mergers.

Strategic Business Planning – Corporate finance advice is often seen as strategic and forward thinking, focussing on growth or exit/end goals for business owners. This often involves a financial and commercial assessment of a business focussing on key aspects that a business may need to improve in order to achieve its goals e.g., successfully fundraising or successfully sale.

Fundraising – Whilst most business owners can look to raise finance on their own, a Corporate Finance advisor can offer a much wider pool of fundraising options and crucially they understand the landscape and type of funding a business needs. When preparing for investment they also understand what lenders and investors deem critical from a commercial, operational or financial perspective. Detailed financial modelling is often needed for complex fundraising, which again is something that a Corporate Finance advisor will specialise in.

Buying or Selling Businesses – A change of ownership transaction (Buying or Selling a business) is often complex in nature and involves numerous stakeholders all pulling in different directions. Some key aspects involved in a transaction include finding the right companies to approach, fundraising, detailed due diligence, understanding the key legal aspects, negotiation of key terms and conditions, deal structuring and transaction execution. A Corporate Finance advisor will navigate, and project manage the hurdles involved in a transaction to ensure a successful outcome.

What makes a good Corporate Finance Advisor?

Corporate Finance advisors can come from a variety of educational and professional backgrounds, but they typically possess strong analytical skills, financial acumen, industry knowledge, and expertise in advising companies on complex financial transactions and strategic decisions.

Overall, a good corporate finance advisor identifies their clients’ strategic objectives and combines expertise, experience, analytical skills, communication abilities, relationship-building capabilities, problem-solving talents, and ethical standards to deliver exceptional service and achieve successful outcomes for their clients.

To figure out which Corporate Finance services you need, click here.

Martin Dean FCCA

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