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€5M Debt Financing for E-Mobility Expansion

Byphilipp

Client Background

An emerging E-Mobility company had successfully developed and launched its next-generation electric vehicle technology. With strong demand in existing markets, the company was ready to scale production and expand into new regions. However, increasing manufacturing capacity required substantial upfront investment. To avoid equity dilution and maintain operational control, the company sought €5M in structured debt financing.

Challenge / Pain Point

  • Capital-Intensive Growth – Expanding production required significant investment in equipment, supply chain, and logistics before additional revenue could be realized.
  • Avoiding Equity Dilution – The company preferred a debt-based solution to finance growth while maintaining long-term shareholder value.
  • Supply Chain Constraints – Delays in securing financing would slow production capacity, risking lost market share to competitors.
  • Lender Hesitation – Many debt providers were cautious due to the capital-heavy nature of the e-mobility sector and uncertainties around market expansion.

Solution / Approach

1. Targeting the Right Debt Providers

  • TULA identified specialized lenders with experience in high-growth industrial sectors rather than traditional banks, which tend to be risk-averse in capital-intensive industries.
  • We positioned the company’s expansion as a measured, data-backed growth opportunity, rather than a speculative manufacturing ramp-up.

2. Structuring the Debt for Maximum Flexibility

We designed a growth-linked debt facility that aligned repayment schedules with expected revenue increases:

  • Initial tranche: Used to scale up production capacity.
  • Second tranche: Tied to entry into new markets, ensuring the company could fund expansion while maintaining cash flow stability.

3. De-Risking the Lending Case

  • By demonstrating strong existing demand and a proven sales pipeline, we provided lenders with clear visibility on revenue potential.
  • We structured collateralized financing options, making the deal more attractive to lenders without overburdening the company.

Outcome / Results

  • Secured €5M in structured debt financing, tailored to the company’s expansion timeline.
  • Enabled immediate production scale-up, ensuring the company could meet increasing demand.
  • Established a financial structure that preserved equity while ensuring long-term growth.

Key Takeaways

  • Debt financing can be structured to scale alongside revenue growth, reducing early financial strain.
  • Lender selection is critical—targeting institutions with sector expertise leads to better financing terms.
  • A clear expansion strategy reduces risk perception, making financing more accessible even in capital-intensive industries.

Scaling production and expanding your market?

TULA structures debt solutions that align with your growth trajectory.

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