People
In disruptive times, CFOs must adapt their financing structures to remain both resilient and competitive. This article, the first in a two-part series, focuses on external financing. We explore how organizations can navigate a tighter credit environment, diversify their funding base, and align financing strategies with a dynamic business reality.
Refinancing conditions are becoming structurally more challenging. After years of ample liquidity and accommodative credit markets, companies now face stricter lending standards, higher risk premiums, and increased scrutiny from banks. While base rates have eased from their peaks, the total cost of financing remains elevated, and covenants and maturities are becoming more restrictive. Against this backdrop, relying on traditional bank lending alone is no longer sufficient. External capital must be actively managed, diversified, and aligned with both asset structures and risk profiles to ensure resilience and strategic flexibility.
The current state of corporate financing
Many companies still rely heavily on conventional lending instruments, such as unsecured revolving credit facilities and term loans, often sourced through a single relationship bank. This approach provides a sense of familiarity and administrative simplicity, but it concentrates counterparty risk and limits access to specialized asset-based or structured solutions.
These challenges are compounded by a disconnect between capital employed, liquidity management, and financing decisions. In many organizations, financial steering remains largely EBITDA-driven, with limited focus on optimizing liquidity distribution or systematically analyzing total financing costs. As a result, liquidity is often dispersed and underutilized, leaving companies less flexible and more exposed when external conditions shift.
Shifting market trends
The lending environment is becoming increasingly restrictive. Following years of elevated corporate leverage, banks are tightening credit standards and covenants in anticipation of higher default rates and a sizeable refinancing “maturity wall” in 2025-2026 (as we explored in our recent DACH debt report, Approaching the maturity wall – Debt refinancing pressures in DACH). This trend is accelerating a structural shift toward collateralized and asset-based facilities.
At the same time, financing costs remain structurally elevated. Even though base rates have moderated, higher credit spreads and risk premiums are keeping costs high. This environment is driving renewed interest in specialized instruments such as factoring, trade finance, and securitized lending, as companies seek greater resilience and flexibility beyond traditional bank loans.
What CFOs should do now
To safeguard access to capital and manage financing costs effectively, CFOs should adopt a more proactive and diversified approach to external financing:
- Regularly review and optimize debt structures. Extend maturities where possible, renegotiate margins, and align financing terms with evolving business models and risk profiles.
- Broaden the financing toolkit. Explore alternative providers and instruments — from factoring and supply-chain finance to asset-backed lending and private credit — to reduce dependency on single relationship banks and enhance liquidity flexibility.
- Activate internal liquidity levers. Combine external diversification with disciplined working capital management to release capital, reduce funding needs, and strengthen resilience against tightening credit conditions.
Preparing for the future
As refinancing headwinds persist, external capital can no longer be treated as cheap, abundant, or inherently flexible. It must be seen as a strategic resource that requires active, portfolio-style management and a willingness to move beyond conventional funding models.
This new reality sets the stage for the second pillar of resilient capital. In the next article, we turn our attention to internal financing. We will explore how CFOs can unlock liquidity from within the business through disciplined working capital management, stronger capital allocation, and closer alignment between operations and the balance sheet. This internal focus is key to reducing reliance on volatile debt markets and strengthening the foundation for sustainable growth.
Read part two of our article series on internal financing:
