Equity Financing

Equity Financing Considerations

Most lending arrangements operate on the principle of debt finance. By taking out a loan, your company incurs a financial obligation to repay that loan and any interest in accordance with the terms outlined in your contract. In some cases, however, equity finance may be a better choice for your company. Working with a knowledgeable Boca Raton equity financing lawyer can help you determine which of these options is most practical and advantageous for your company.

What Is Equity Financing?

Equity financing allows your business to raise money by selling stocks to investors. Stocks represent a portion of your company’s value and convey an ownership stake to buyers of these financial instruments. This can help your business to avoid debt while ensuring that you have adequate funds on hand to manage ongoing expenses and to continue to grow and expand in the Florida economy.

Benefits and Drawbacks of Equity Financing

Equity financing offers some real advantages for business owners in our area, including the following:

• Unlike debt financing arrangements, your company will not need to repay funds acquired through equity financing.
• Acquiring investors for your company can sometimes provide you with added funds for future expansions and acquisitions.
• Equity financing can also be a useful way to acquire funds for companies with less than two years in the competitive marketplace.

These financial arrangements are not without their disadvantages, however:

• In some cases, investors may wish to take a more active role in managing the direction and day-to-day activities of your company. This can reduce your control over your business operations and may result in conflicts between your management and your shareholders.
• The time and effort needed to attract and acquire investors can represent a significant drain on your labor pool.

By working with a qualified Boca Raton equity financing lawyer, you can often determine whether this option is right for your business.

At the Boca Raton Business law firm of Berkowitz and Associates, we take pride in delivering the most practical and actionable guidance for our clients in navigating equity financing issues and helping businesses to make the right choices in the competitive marketplace. If you are considering outside investment in your company, give our office a call today at 561-982-7800 to schedule a consultation. We will walk you through your options and help you to determine the most appropriate choice for your business. The entire team at Berkowitz and Associates is ready to serve your legal needs.