Growth or new business opportunities may make it necessary to raise additional funding. But which is the best form of finance for your business or project?
Here are some important points to consider:
• Is your business growing or expanding rapidly?
• Would you welcome the input of a partner whose interests are aligned with your own?
• Do you believe that it is too expensive for you to raise capital?
• Would your cash flow profile make it difficult to commit to regular interest payments?
• Would you find it difficult to repay a loan within a tight time frame of around three years?
• Are you looking for a longer-term investment?
• Is flexibility a key priority?
• Would you value the additional broad basis of experience and contacts that an equity investor can bring?
If your answers are predominantly yes, then equity may be the most effective form of finance to take your business to the next level.
Of course, the answer doesn’t have to be debt or equity. The best solution is often a combination of both. Investors such as BGF can work alongside other investors, and even lenders, for ultimate flexibility.