Introduction to Finance Sourcing

It is likely that at some point during the life of your company, financing will be needed.  Identifying this need for financing may be rather easy but deciding upon the most appropriate type and source of financing for a particular project can be quite a challenge.   Interest rates, repayment terms, the age of your company, the strength of your company and whether or not you desire to have outside individuals involved in your organization are all factors that will come into play when deciding upon a type of financing.  Due to the important and long-lasting nature of these decisions, it is common for companies to seek out the advice and expertise of a seasoned professional to provide them with the guidance and education needed to make an informed decision.

Types of Business Financing:

Debt Financing
Loans from a Commercial Bank

Debt financing does not give the lender ownership control, but the loan principal must be repaid with interest. Length of the loan, interest rates, security and other terms depend upon what the loan is being used to finance.

Asset-Based Lending

Asset-based lenders provide a variety of financial services to businesses through secured lending against the assets of the business.  Loans for machinery and equipment, real estate, business acquisitions, and the factoring of accounts receivable can all be structured through an asset-based lender.

Equity Financing

In its most basic form, equity financing results in the repayment of principal and/or return only if the venture produces sufficient revenue for that purpose.  Due to the risks associated with this type of financing, the possible capital sources could be anyone, anywhere, anytime depending on the amount of financing needed, the purpose of the financing, and stage of the business in question.

Equity financing requires a consideration of ownership, profit sharing, benefit sharing, operational control, valuation, and exit strategies as important issues to be carefully evaluated.

Venture Capital, Friends and Relatives, and Angel Investors are a few of the more commonly used sources of equity financing.

How we can help

Regardless of the type of financing needed, the principals of Leading Change Business Advisers, Inc. have the knowledge and experience needed to make your search for financing successful.  Our involvement in a project can vary greatly and may range from something as simple as introducing a client to a few strategically chosen lenders, to something as complex as the creation of a presentation and all of the additional documentation required by a group of equity investors.

The following are a few of our more commonly requested services: