Private Credit | Debt Underwriting | Capital Advisory
Credit Underwriting Advisory for Companies Raising Private Debt
Companies raising private debt need to present lenders with more than a financing request. Institutional lenders must understand the borrower's repayment capacity, leverage, liquidity, collateral, existing capital structure, downside risks and the commercial rationale for the proposed facility.
Financely provides paid credit underwriting advisory for companies raising private debt. We help eligible borrowers analyze debt capacity, structure the proposed facility, identify underwriting weaknesses and prepare lender-ready credit materials before approaching private credit funds, direct lenders and other institutional capital providers.
Raising Private Debt?
Financely provides paid underwriting, debt structuring and capital placement support for qualifying commercial transactions. Submit your financing requirement to receive a quote.
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What Credit Underwriting Advisory Covers
Credit underwriting advisory evaluates a proposed financing from the perspective of a lender. The objective is to determine how a transaction can be structured so that the amount requested, repayment source, leverage, collateral and contractual protections form a commercially coherent credit case.
This work is relevant when a company intends to raise private credit, refinance bank debt, finance an acquisition, fund capital expenditures, recapitalize its balance sheet or obtain a structured debt facility outside traditional bank lending.
Typical Financely Mandate
Financely generally works with established companies, sponsors and acquisition vehicles seeking approximately US$2 million or more of commercial financing. Transactions must have an identifiable use of proceeds, a credible repayment source and sufficient financial information to support underwriting.
What Private Credit Lenders Evaluate
A private lender is underwriting the probability that principal and interest will be repaid under both the expected operating case and a weaker downside case. The analysis therefore extends well beyond revenue growth or management projections.
Cash Flow
Debt Service Capacity
Repayment analysis
Historical and projected cash generation is assessed against interest, amortization and other fixed obligations.
Leverage
Debt Capacity
Sustainable sizing
The lender considers senior leverage, total leverage and the amount of debt the business can realistically support.
Liquidity
Cash Availability
Downside protection
Working capital, minimum cash requirements and liquidity after closing are reviewed.
Collateral
Security Package
Recovery support
Receivables, inventory, equipment, real estate, shares or other assets may support the facility.
Earnings
EBITDA Quality
Normalized results
Adjustments, nonrecurring items and aggressive add-backs are tested before leverage is calculated.
Concentration
Revenue Risk
Customer exposure
Dependence on major customers, contracts or suppliers can materially affect lender appetite.
Structure
Existing Debt
Priority analysis
Existing facilities, liens, maturities and intercreditor considerations affect the new lender's position.
Downside
Credit Risk
Stress testing
Lower revenue, margin compression, delayed collections and higher interest expense may be modeled.
Debt Capacity Analysis Before Approaching Lenders
One of the most important questions in a private debt raise is the amount of debt the company can support. The amount management wants to borrow may differ materially from the amount a lender can underwrite.
Financely can analyze historical EBITDA, normalized earnings, free cash flow, capital expenditures, working-capital requirements, existing debt service and forecast performance. We then consider how the proposed facility would affect leverage and liquidity after closing.
A company seeking US$25 million, for example, may have sufficient enterprise value to support the request but insufficient cash flow to service the full facility. The appropriate structure could require a smaller senior loan combined with additional equity, subordinated debt, preferred capital or another financing source.
This analysis is particularly important for companies pursuing private credit financing, where lenders have greater structuring flexibility than traditional banks but continue to require a defensible repayment case.
Key Credit Metrics Used in Private Debt Underwriting
The appropriate metrics depend on the borrower and facility. A cash-flow lender underwriting an operating business will focus on different information from an asset-based lender financing receivables or a project lender underwriting contracted infrastructure cash flows.
| Metric |
What It Measures |
Why It Matters |
| Debt to EBITDA |
Debt compared with normalized operating earnings. |
Helps determine leverage and debt capacity. |
| Interest Coverage |
Earnings or cash flow available relative to interest expense. |
Indicates the borrower's ability to service financing costs. |
| Fixed Charge Coverage |
Cash available for interest, amortization and other fixed obligations. |
Provides a broader view of recurring debt service capacity. |
| Free Cash Flow |
Cash generated after operating requirements and capital expenditure. |
Supports scheduled amortization and optional debt repayment. |
| Loan to Value |
Debt compared with collateral or enterprise value. |
Helps assess lender recovery protection. |
| Liquidity |
Cash and available financing following the transaction. |
Determines the borrower's ability to absorb operating volatility. |
Ratios alone do not produce a credit decision. Lenders also assess management quality, competitive position, customer concentration, cyclicality, contractual revenue, legal risks, jurisdiction, asset quality and the reason capital is being raised.
Capital Structure Analysis
A new private debt facility must fit within the borrower's existing capital structure. Financely reviews outstanding loans, revolving facilities, shareholder loans, leases, preferred capital and other obligations that could affect the proposed lender.
Senior Secured Debt
First-priority debt secured over company assets. This layer normally has the strongest contractual and collateral position.
Second-Lien Debt
Secured debt ranking behind the first-lien lender under an agreed priority structure.
Unitranche
A combined senior and subordinated risk structure documented through a single borrower-facing facility.
Mezzanine Debt
Subordinated capital with higher pricing and potentially PIK interest, warrants or other return enhancements.
Preferred Equity
Capital ranking ahead of ordinary equity but generally behind contractual debt obligations.
Common Equity
Sponsor or shareholder capital absorbing the first economic loss in the transaction.
The appropriate capital structure depends on the company's cash flow, leverage tolerance, transaction size, ownership objectives and available collateral. Financely can advise on the proposed financing mix before a broader debt advisory process
begins.
Credit Underwriting for Acquisition Financing
Acquisition financing requires additional underwriting because the lender is evaluating the combined company after closing rather than the buyer's historical balance sheet alone.
The credit analysis typically includes purchase price, sources and uses, sponsor equity contribution, target EBITDA, pro forma debt, expected synergies, integration costs and the amount of liquidity remaining after closing.
Lenders may also assess the acquisition multiple, percentage of the purchase price financed with debt and whether the target has sufficient free cash flow to support the proposed leverage.
Transactions requiring higher leverage may be suitable for leveraged finance advisory, including unitranche, first-lien, second-lien, mezzanine or other sponsor-backed structures.
What a Lender-Ready Credit Package Should Contain
A private debt raise becomes easier to evaluate when lenders receive a consistent package that explains both the commercial opportunity and the credit risk. Sending an investor presentation and financial statements without a financing structure often leaves the lender to reconstruct the transaction independently.
Financely can organize the transaction into a credit package addressing the financing requirement, use of proceeds, company profile, historical performance, projections, repayment source, existing capital structure, collateral and proposed facility terms.
1. Financing Requirement
Define the amount required, currency, use of proceeds, desired closing date and required facility term.
2. Historical Financial Analysis
Review revenue, profitability, cash flow, working capital, capital expenditures and existing debt obligations.
3. EBITDA and Cash Flow Normalization
Separate sustainable operating performance from nonrecurring expenses, unsupported adjustments and one-time events.
4. Debt Capacity
Test leverage, interest coverage, fixed charges and liquidity under the proposed financing structure.
5. Downside Analysis
Assess whether the company can continue servicing the facility if revenue, margins or cash conversion weaken.
6. Facility Structure
Define indicative seniority, security, tenor, amortization, repayment mechanics and any required liquidity support.
7. Data Room Preparation
Organize financial statements, projections, ownership records, contracts, debt schedules and other lender diligence materials.
8. Lender Engagement
Where placement is included, Financely approaches appropriate lenders on a best-efforts basis and supports the subsequent underwriting process.
Documents Required for Private Debt Underwriting
Companies seeking institutional debt should expect to provide detailed information. The exact requirements depend on the transaction, but an initial underwriting file may include:
- Three years of historical financial statements where available
- Current year-to-date management accounts
- Monthly or quarterly financial performance
- Detailed financial projections
- Existing debt schedule
- Accounts receivable and accounts payable aging
- Customer concentration information
- Ownership and organizational structure
- Capital expenditure requirements
- Material customer and supplier contracts
- Acquisition documents where applicable
- Schedule explaining the proposed use of proceeds
Borrowers should also disclose material litigation, tax arrears, covenant breaches, defaults, customer losses or other issues likely to affect a credit decision. These matters can often be analyzed and addressed during structuring. Discovering them late in lender diligence can materially weaken confidence in the transaction.
Common Reasons Private Debt Raises Fail
Private debt transactions frequently fail because the requested structure does not match the company's financial capacity. A business may have strong revenue but insufficient free cash flow after working-capital requirements. Another may generate attractive EBITDA but already carry excessive leverage.
Other common issues include unsupported EBITDA add-backs, weak liquidity following closing, customer concentration, insufficient sponsor equity, short debt maturities, existing liens, poor financial reporting and projections that depend on aggressive future growth.
Underwriting advisory identifies these issues before broad lender outreach. The solution may involve reducing the facility size, extending amortization, adding equity, changing the security package or selecting a different form of credit.
A Strong Credit Package Does Not Guarantee Approval
The purpose of underwriting advisory is to prepare a commercially credible financing request and identify an appropriate structure. Every lender completes its own underwriting, due diligence, compliance review and credit approval.
Who Should Hire a Credit Underwriting Advisor?
Credit underwriting advisory is most useful when a company has a defined financing requirement and expects to approach institutional lenders.
Typical clients include middle-market companies raising growth capital, businesses refinancing upcoming maturities, sponsors financing acquisitions, companies replacing bank debt, asset-heavy businesses seeking structured loans and borrowers that have already received conflicting feedback from lenders.
Financely's work is generally suited to post-revenue companies with reliable financial information and a credible source of repayment. Earlier-stage companies may require equity, venture debt or another capital solution depending on their revenue profile and available collateral.
Credit Underwriting Advisory Fees
Financely provides credit underwriting and private debt advisory through paid mandates. The professional fee depends on transaction size, complexity, the quality of existing financial information and whether the engagement includes lender placement.
The advisory mandate may cover underwriting, financial analysis, transaction structuring, preparation of lender materials, data room organization and institutional outreach.
Advisory fees are separate from lender arrangement fees, legal costs, valuation expenses, collateral appraisals, due diligence expenses and other third-party transaction costs.
Financely does not provide free transaction structuring through introductory consultations. Companies seeking assistance should submit the transaction through the formal request process so that scope, eligibility and professional fees can be established before work begins.
How Financely Handles a Private Debt Underwriting Mandate
Financely combines underwriting analysis with broader private debt advisory
where required. The process begins with understanding the amount requested, use of proceeds, company financial position and target closing timeline.
We then assess debt capacity, identify material credit risks and develop an indicative financing structure. Where the transaction is eligible for placement, the lender package can be used for targeted engagement with private credit funds, direct lenders, specialty finance firms and other institutional capital providers.
Our role is advisory and best efforts. Financely does not control lender credit committees and does not guarantee terms, approval or funding.
Request a Credit Underwriting Proposal
Submit the amount required, use of proceeds, company financials, existing debt structure and target closing date. Financely will assess the mandate and provide a quote for eligible transactions.
Request a Quote
Frequently Asked Questions
What is credit underwriting advisory?
Credit underwriting advisory evaluates a proposed debt transaction from a lender's perspective. It can include debt capacity analysis, financial normalization, credit risk assessment, facility structuring and preparation of lender-ready materials.
Can Financely prepare my company for a private credit raise?
Yes. Financely can analyze the financing requirement, structure the proposed facility, organize supporting financial information and prepare the transaction for institutional lender review.
How much private debt can my company raise?
Debt capacity depends on cash flow, leverage, collateral, liquidity, industry risk, existing debt and the proposed use of proceeds. The amount requested by management may differ from the amount lenders are willing to underwrite.
What size transactions does Financely work on?
Financely generally focuses on commercial financing requirements of approximately US$2 million or more. Eligibility depends on the borrower, jurisdiction, financing product and transaction complexity.
Does Financely provide private debt directly?
No. Financely is an independent corporate finance advisor and arranger. Where appropriate, we can structure a transaction and approach suitable private credit providers on a best-efforts basis.
Does credit underwriting guarantee financing approval?
No. Underwriting advisory improves transaction preparation and helps determine a commercially credible structure. Every lender makes its own independent credit decision.
What should I submit for an initial review?
Companies should provide the financing amount, use of proceeds, recent financial statements, existing debt, ownership information, target closing date and a clear explanation of how the proposed facility will be repaid.
Important: This material is for general information only and does not constitute legal, tax, investment, regulatory or credit advice. Financely provides corporate finance advisory, underwriting support and arranging services. Financely is not a bank, direct lender or deposit-taking institution and does not guarantee financing approval, pricing, terms, timing or transaction completion. All transactions remain subject to KYC, KYT, AML and sanctions screening, due diligence, documentation and final institutional approval.
