Three Benefits Of Having Your Business Issue Securities

Wondering if it's time for your business to issue some securities? While the process of getting involved with securities can be a bit confusing and possibly even a little overwhelming, the benefits can be worth it. Here's a look at what your business could gain by working with a securities law expert and issuing securities:

1. A boost to working capital

Whether a business is a massive, multi-national company or a relatively small organization, issuing securities can help the business gain a boost to its working capital. If you need help covering operating expenses or if you anticipate an increase in revenue if you can just get past another financial hurdle, issuing securities may be the right option for you. It allows you to access cash through a couple of different paths.

2. Multiple options

Unlike some other types of business funding, issuing securities provides your company with a few different options. The most popular security options in most cases are stocks or bonds. If you opt to issue stocks, you are essentially selling equity in your company, and anyone who buys a stock is buying a piece of your company. If you are profitable, your stockholders can sell the stocks at a profit, but if your business loses money, the value of the investors' stocks fall as well.

Conversely, bonds are a debt security. When you "sell" a bond to an investor, the investor is actually loaning you money. Based on the bond agreement you draft with the help of your securities lawyer, the investor can collect interest on the bond at certain intervals, and then, typically, the investor can cash it in for its face value after a set maturity date. With both of these options as well as all the different ways you can configure the securities agreement, you can easily find a solution that works for your company's needs.

3. Alternative funding

When you work with a lawyer to sell securities for your business, you tap into an alternative funding source. You don't have to worry about traditional bank loans, if your debt-to-revenue levels are already too high, or similar factors. Instead, you can simply leverage the value of your business to attract investors and access the funding you need.

Want to learn more about how selling securities can help your business? Contact a securities law attorney today. These professionals can help you decide if issuing securities is right for your business.

 

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