Bank looks at acquisitions primarily from the perspective of risk management – this requires you to have a clear and credible business plan. If you apply for financing from us, we’ll assess the profitability of your core business and the cash flow it generates. In most expansion investments, including acquisitions, repayment ability and the project’s eligibility for financing largely depend on the state and profitability of your current business. If your core business is profitable, running smoothly and generating a steady cash flow, you’ll have the means to pay off your debt and invest in growth.
When evaluating your business, we primarily focus on stability of cash flow, business plan and leverage ratio. We also carry out a thorough assessment of the target company’s competence, competitiveness and profitability, evaluate the compatibility of the two businesses and look at how professional the acquisition process is and how the risks are managed. Most successful companies growing inorganically make small and medium-sized acquisitions in proportion to their size and risk-bearing ability, while gaining knowledge of the market and experience in the acquisition process.