Showing posts with label traditional credit. Show all posts
Showing posts with label traditional credit. Show all posts

Tuesday, January 8, 2013

Funding by the Stock Exchange

If your business requires funding and you want to be able to get it for yourself without having to borrow money from a bank you will need to set the rates terms, conditions, warranties can support and impact on debt found by issuing securities exchange.

Successful companies, tax, luxury and excellent contacts with financial institutions, they might think Shtzrcimim financial covered and not have to issue securities on the stock exchange, but if it is "money that should not stop the alternatives reduce financial costs, improve cash flow, diversify their funding sources and thus improve the overall performance of the company for analysis.

The question is very simple, if your company can pay a higher yield than was offered on deposits of financial institutions, then it might be an interesting alternative to the public return on their savings in order to maximize if this rate while serving at least pay if you are a financial institution for a loan and reduce the their funding costs. If you add the ability to decide when and how to pay the debt, but also have flexibility to plan their cash flow and take into account that he had to mortgage or pledge the assets of the company, so why not?

It is not a substitute for a traditional credit, but similar to the principle of not putting all your eggs in one basket, the funding sources allow companies to manage their debt structure and reduce the weighted cost of one of them. Do you have an agency relationship with only one or a few financial institutions can be very dangerous and can also be a chance for their activities to expand as financial institutions have limitations imposed by the regulations required, internal policies, so that for instance the borders concentrations of credit by sector, related parties , type of warranty, etc.. Your bank is unable to meet the conditions you need financial institutions directly to the public by issuing shares to the vendor.

Ask that people think it's not so easy, they switched on the financial institutions which meet a number of complex rules, but in fact the main difference with the traditional credit derivative is that it has to give all the important information, because no one gives money without having to know whether borrower can pay, which means that if you want to raise money from the public information must be reported. For some, this is reason enough not to separate the economic benefits that might be me, to others it's a big problem, contrary to, it serves as another way to raise awareness and show arranged and transparent company, making luxury, suppliers and public creditors, while the economic benefits.

The above does not mean that you only can do it, not necessarily to borrow money from a bank, it is clear that it must meet certain conditions, the following procedure and display a variety of information, but the company can advise you permission during the process, learn, discuss alternative and submit it for when necessary.