What is the best way to provide additional operating capital or fund an acquisition or expansion? There will be many times over the life of most successful businesses where an infusion of capital is required. In some cases, it’s simply a matter of cash flow – the receivables are there, and new sales are continuing to pour in but cash is required to continue operations and keep the pipeline going. In other situations there may be an opportunity to acquire the assets of another company, buy-out a competitor or purchase additional real estate or equipment to expand the business. There are many sources of capital for these situations, but each option comes with its own inherent costs and potential for relinquishing a portion of decision making or control. Do you bring in a new partner? Should you borrow against existing assets or sign personally for needed funds? Is it in your interest to issue stock, and raise needed operating capital through more traditional means? What are the implications from a profit and loss perspective? How much ownership interest and control will be relinquished? What are the tax ramifications of each alternative?
There are laws that govern the investment of capital into a business, and contracts should be carefully constructed and reviewed to ensure a successful outcome while protecting the interests of the business and associated parties. If you are interested in raising capital and are evaluating options to do so we invite you to contact us at 866-631-3470 for a free consultation. We will discuss your objectives and provide seasoned and experienced insight into available options and help you to identify your best alternative and develop the needed agreements, and instruments to take your business to the next level.
