Access to Capital: KPMG educates
You know what you need: working capital to support your ongoing operations, allow you to grow and expand or support an acquisition strategy. But without a deeper understanding of your specific capital needs – what options are available in the market and what your optimal capital structure should look like – the how can be much harder to identify.
As the U.S. economy continues to stabilize following the recession, business owners today enjoy better access to the capital markets than they have in recent years. Lenders are becoming increasingly active and competitive. Although impacted by more stringent regulatory guidelines, both traditional banks and alternative investors are making financing options and solutions more broadly available, flexible and creative. You have many reasons to be optimistic. But at the same time, you may be overwhelmed by the vast complexities of accessing the capital markets – from tracking current debt and equity market activity and trends, to understanding the credit and investment objectives and lending decision criteria of different types of capital providers, to planning for and executing a successful transaction. That is because your approach will differ greatly based on your current circumstances and future objectives. Whether you are raising early-stage growth capital, financing an acquisition, changing your capital structure, refinancing existing debt, or thinking about a liquidity event, here are some key questions you should ask yourself before moving forward with a transaction:
- What type of financing should I seek to achieve my business goals?
- What are the advantages and disadvantages of different sources and types of investments?
- How do I find the capital provider that offers the right balance of cost efficiency, accessibility and structuring options for my business?
- How can I attract investors but maintain the greatest level of control over the management of my company?
- What do I need to do to prepare my company for a transaction – financially, operationally and from a management and governance standpoint?
- Do I have the right mix of debt and equity to support my business goals?
- What is the optimal capital structure to best support my strategic initiatives, and how do I get there?