Debt Capital
Debt Capital Funding
refers to raising capital for a business or project by borrowing money, typically through loans or issuing bonds, rather than selling ownership stakes (equity). It involves borrowing funds with the promise to repay the principal amount along with interest within a specified period. Debt capital funding can be obtained from various sources such as banks, financial institutions, private lenders, or through the issuance of corporate bonds in the public market.
Businesses often utilize debt capital funding for various purposes, including expanding operations, purchasing equipment, funding research and development, or managing cash flow. While debt financing can provide immediate access to funds without diluting ownership, it also comes with the obligation to repay the borrowed amount plus interest, which can increase financial risk, particularly if the business encounters financial difficulties or struggles to generate sufficient cash flow to service the debt.
Lending: uniquely structured to fit each business.
Credit Lines
A credit line is a financing option provided by a bank or other financial institution to a business. This lending facility allows the company to access funds when needed. The financial institution offers a certain credit limit to a business over a set time frame. A credit line can be secured or unsecured. Credit lines give the borrower a lot of flexibility in managing there payment terms.
Term Loans
A term loan is repaid in regular installments over a specified period, known as the loan term. These loans are commonly used by businesses to finance specific projects or investments, such as purchasing equipment, expanding operations, or acquiring another company. Term loans typically have fixed or variable interest rates and may require collateral to secure the loan.
Receivables Financing
Receivables financing, also known as accounts receivable financing or invoice financing, is a type of financing where a company uses its accounts receivable (unpaid invoices owed by customers) as collateral to obtain funding from a lender. It provides businesses with immediate access to cash by leveraging their outstanding invoices, rather than waiting for customers to pay.
Acquisition Financing
Acquisition financing refers to the process of raising capital to fund the acquisition of another company or a significant portion of its assets. It involves securing funds to cover the purchase price, transaction costs, and potentially, working capital needs associated with integrating the acquired entity into the buyer's operations.