Lighter Capital
JULY 20, 2023
Some founders may choose to spend months pursuing equity funding from angel investors and venture capitalists, while others leverage debt financing to grow quickly without giving up equity or control too soon. Why do startups use debt financing? It’s best to start with the basics.
Sun Acquisitions
APRIL 26, 2024
The risk-reward equation in M&A financing is a delicate balance, where potential pitfalls and gains play a pivotal role in shaping the merged entity’s future. This blog post delves into the intricacies of different financing models, shedding light on the associated risks and rewards.
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Andrew Stolz
AUGUST 6, 2020
The optimal capital structure of a firm is the right combination of equity and debt financing. Debt financing may have the lowest cost, but having too much of it would increase risks to the shareholders. Because it is tax-deductible, debt financing tends to have a lower cost than equity financing.
Sun Acquisitions
FEBRUARY 14, 2024
Consider options such as raising capital through equity financing or securing a bank loan to fund your expansion plans. While it provides capital without the burden of debt repayment, it dilutes ownership and may involve relinquishing some control. Debt Financing: Debt financing involves borrowing money to fund your acquisition.
Andrew Stolz
AUGUST 6, 2020
Where V (unlevered) = company with no debt financing and V (levered) = company with some debt financing). Investors that purchase shares of a leveraged firm, one with a mix of debt and equity financing, would receive the same profits as when buying shares of an unleveraged firm, which is financed entirely by equity.
Sun Acquisitions
FEBRUARY 28, 2024
If you have substantial cash reserves, you may opt for an all-cash deal, reducing debt burden and interest costs. Debt Financing Debt financing involves borrowing money to fund the acquisition. It can be attractive if interest rates are low, and your cash flow can support the debt service.
Benchmark Report
JULY 1, 2022
First, the financing needs to be raised with consideration of the company's operating cash flows. For example, if the business uses debt financing, it should have sufficient funds to cover the interest and repay the debt.
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