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RAISING FINANCE small-med org. (Retained earnings and working capital…
RAISING FINANCE small-med org.
Retained earnings and working capital management
+cash at bank
+stock (inventory)
+receivables (cash due from customers)
Financing through debt factoring
recourse
cheaper, but in case of non-payment, debtors will collect assets
non-recourse
higher fees, but not risking assets if no payments made
bank finances and overdraft
overdraft
higher availability for small business
often expensive
need to be approved
might need provide security (property)
bank facility finance
bilateral
right to draw from one bank
syndicated
number of banks share facility
Lease finance
finance lease
owner bank - organiz benefits and risks \
operating leases
short term. bank retains risks and benefits
equity finance
ordinary shares
ownership of company, might get dividends as well
preference shares
ownership, rate of dividends fixed but paid before ordinary shareholders
venture capital + private equity
helps to avoid listing on stock exchange
potentialy higher return for investor
ANGEL investors - investing in small starting companies