Tailor-made financing via the stock exchange — borrowing to finance growth

The German economy is proving robust in the financial crisis. German SMEs in particular are well positioned to take on the challenges of the situation. In this context, it is important to position oneself correctly for the future and to set the course for growth and innovation financing at an early stage. The capital can be raised on the stock exchange, for example through a bond issue.

German SMEs appear to be very well positioned in the financial crisis. The German economy is largely unimpressed by the situation on the European financial markets. But in addition to technical innovations, entrepreneurs must also keep an eye on financing growth in order to remain competitive. If loan financing from banks proves too difficult for entrepreneurs in the wake of the financial crisis and the requirement for higher equity capitalization at institutions, financing will have to be structured differently: Why not raise outside capital via the stock market?

Since fall 2010, companies have rediscovered an old form of financing: the corporate bond. Market operators have responded by creating suitable markets for this form of financing. Medium-sized companies in particular are the focus here. The capital requirements of the companies whose bonds have so far been listed in these segments range from 15 million to 150 million euros. These companies come from a wide range of industries, some of which are already listed on the stock exchange or have not yet even entered the capital market. This proves that these midmarket segments are suitable for all types of companies.

Many medium-sized entrepreneurs categorically reject a classic IPO as a financing channel. The reasons for this usually lie in the assumption that a stock market listing restricts entrepreneurial freedom: Too much transparency, loss of independence and simply too high costs deter founders from taking the path to the stock markets.