Capital raising
Capital raising in Panama
Raising finance is not a matter of knocking on more doors. It is a matter of presenting the transaction so that the credit committee or the investor can approve it without having to assume anything.
DB Consultants Group structures and presents financing transactions for Panamanian companies, to banks and to investors.
When
What the capital is for
- Growth. New capacity, points of sale, fleet, inventory to serve a larger contract.
- Buying an asset or a company. Financing part of an acquisition price and matching the repayment to the cash that asset will generate.
- Replacing expensive debt. Consolidating short-term lines into a long-term structure the business can actually service.
- Funding working capital. When the collection cycle is longer than the payment cycle and the operation consumes cash even while profitable.
- Bringing in a partner. When debt is no longer the right instrument and what is needed is real equity.
The sources
Where the money can come from
Commercial banks
Loans, working capital lines, financial leasing and letters of credit. The most common route, and the one that depends most on the quality of the file.
Capital markets
Corporate bond issues or negotiable commercial paper. It requires size, orderly accounting and a willingness to disclose, but it changes both cost and tenor.
Investor equity
Bringing in a financial or strategic partner. It is not repaid, but it is paid for in ownership: that is why the valuation done beforehand decides what it really costs.
Specific structures
Factoring, invoice discounting, asset leasing and supplier financing. They solve particular needs without committing the long-term structure.
The context
Why the standard has risen
The Panamanian economy grows at 4.8% year on year while credit to the private sector advances by just 0.58%. Banks did not stop lending; they became selective. Reading from our Observatory (in Spanish).
And since the country lost its investment grade rating at Fitch in March 2024, financing has become more expensive along the whole chain. What it means for a company (in Spanish).
The practical result: the same file that was approved three years ago is sent back today. Not because the company is worse, but because the level of evidence required has risen.
Sources: Instituto Nacional de Estadística y Censo and Superintendencia de Bancos de Panamá.
The process
How the transaction is structured
- Deciding how much, and what forThe amount comes out of the model, not out of the wish. Asking for too much raises questions; asking for too little means coming back in six months, and that second round is always more expensive.
- Choosing the instrument and the tenorSo that the repayment calendar matches the cash the investment will generate. Financing long-term assets with revolving lines is the most frequent structural error.
- Building the fileFinancial statements, projections with explicit assumptions, sensitivity analysis, use of proceeds, collateral and a contingency plan if the base case does not hold.
- Presenting to several institutionsIn parallel, not one after another. Two offers change the rate, the tenor and the collateral required far more than any argument.
- Negotiating the termsRate, tenor, grace period, collateral, covenants and fees. The real cost of a loan is rarely in the rate alone.
- Closing and disbursementCoordinating the conditions precedent and staying with it until the money is in the account.
Eight to twelve weeks for a standard bank transaction, from complete information to disbursement.
Warnings
What gets a file sent back
- Projections with no visible assumptions. A committee does not approve numbers it cannot trace back to their source.
- A single scenario. Presenting only the favourable case says the risk was never measured.
- A vague use of proceeds. «Working capital» with no breakdown stops more applications than anything else.
- Going bank by bank. Every rejection leaves a trace and weakens the next conversation.
- Disorderly accounting. Before asking for money you have to be able to explain last year without excuses.
If the company already carries debt it cannot service, the route is not more financing but restructuring what is already there.
Common questions
Frequently asked questions
How long does it take to raise financing?
Eight to twelve weeks for a standard bank transaction, from complete information to disbursement. A capital markets issue takes considerably longer.
Does the firm obtain the money or only prepare the file?
It structures the transaction, prepares it, presents it to several institutions and supports the negotiation. The bank or the investor is the one who approves; the adviser’s job is to make sure the transaction arrives in a condition to be approved.
Does it help if the company has already been turned down by a bank?
Yes, and it is a frequent engagement. Almost always the rejection was not about the business but about how it was presented: a vague use of proceeds, a single scenario, or projections with no support.
Should we approach several banks at once?
Yes, in parallel and with the same file. Going one at a time leaves a trail of rejections and weakens every subsequent conversation.
What matters more, the collateral or the cash flow?
The cash flow. Collateral defines how much the bank recovers if something goes wrong, but approval rests on demonstrated capacity to pay.
Can a foreign parent company guarantee the facility?
Yes, and it usually improves the terms, but it does not replace the local file: the Panamanian bank still lends against the local operation’s cash flow. A parent guarantee shortens the discussion about collateral, not the one about capacity to pay.
What if what we need is a partner rather than debt?
Then the work starts with the valuation, because it determines how much ownership that capital costs. See business valuation.
Is the engagement confidential?
Yes. The nature of every engagement is confidential and is not disclosed without the client’s written authorisation.
Let’s talk about your transaction
A first conversation is enough to define the amount, the instrument and the information that will be needed. It is confidential and commits you to nothing.