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raising capital
Unless you are starting very small or bootstrapping your business with 'sweat equity,' it takes money ("capital") to start a business. Part of the purpose of a business plan is in determining how much money is needed.
Well established businesses also routinely raise capital in order to finance expanded operations.
Capital can be either paid in equity or borrowed.
Paid in equity capital is direct investment by the investor - in exchange for a percentage of ownership in the company. For large, publicly traded corporations - paid in capital comes in the form of subsequent stock issues. These new stock certificates are sold for cash - and the company raises the targeted amount of capital without incurring future repayment obligations. Although this results in a "dilution" of ownership for previous stockholders, it is understood that the infusion of additional capital will, in the long term, make everyone's shares more valuable.
Borrowed capital comes in the form of loans from family and friends, loans from the bank - such as business lines of credit or asset financing, or in the case of publicly traded corporations - bond issues with fixed or variable interest rates and a set repayment schedule.
Al Rasch & Associates are experts in obtaining working capital and small business loans for small to medium sized businesses. Whether negotiating a line of credit, equipment financing or refinancing, or planning a debt instrument such as bonds - they are experienced in determining the debt instrument most appropriate and cost effective for your business.
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