COMMERCIAL DUE DILIGENCE
Due diligence in support of a proposed business venture or commercial loan typically covers the personal histories of the target organization's key officers and the legal standing and known performance of the company. But this alone is probably insufficient for making investment decisions in some opaque business sectors or in emerging or frontier markets where reliable information may be scarce.
Unlike most companies providing due diligence investigations, Inquesta can more fully assess the risk to a contemplated project by adding political and reputational risk dimensions to our commercial projects, when the circumstances warrant and at a client's request. This approach can reveal:
> Undisclosed history of corruption and bribery
> Reputations of the company and its principals
> Political relationships and influence
Case Study: From Upstart to $50 Million Funding and Success
Inquesta was tasked to study a technology company in Florida looking to expand it's South Florida operation to the rest of the world. Our client bank was concerned that the principals, who hailed from a high risk country in Latin America, could have a history of concern to the Patriot Act and other laws. They were also concerned about the reputation and financial history of the growing company. Research put at ease the lender's concerns and the funding was approved. The company's performance exceeded the lender's expectations and within six years has grown into a highly profitable multi-billion dollar operation.
Case Study: Factoring Company Avoided a Potential Scam
A South Florida financing client requested due diligence on a company wanting factoring services. The company wanted to sell their accounts receivables that were expected to flow at about $40,000 per month to the financier for a "factoring" fee. The financier calculated that the initial value of the receivables portfolio was represented to be about $60,000. Our research discovered a very checkered history on all three principals looked into. All three had criminal histories including past financial frauds and schemes in several states. The account was denied and a potential $50,000 loss was averted.
Armed with details about an opportunity, you can make well-informed go/no-go decisions or set reasonable investment limits.