Debt and Equity
Acting for numerous business owner clients, we understand the challenges that funding your business can present. We can advise on issues associated with external funding, advising on both debt and equity.
Where a third party provides facilities it often takes the form of debt – in simple terms a loan. Terms on which a loan is negotiated often relate to its interest, arrangement fees and security. There are often reporting requirements and restrictions on the borrower’s behaviour when the loan is outstanding. Debt can be provided by a number of organisations from crowd funding though private individuals to financial institutions.
How can we help?
If you are considering taking on debt to fund your business, our experienced team can:
- Negotiate the terms of the funding documentation
- Negotiate the terms of the security
A party investing in an organisation can often acquire an interest in return for the investment of funds. An investor in the organisation may be a private individual fund or another corporate.
Unlike debt, equity is not repayable but the investor will want to see a return on their investment, through dividends, when the organisation is either sold or their interest is acquired by a third party. Like the provider of debt, an investor will generally require the terms of their investment to be both regulated and formally recorded. This will often be done through an investment or shareholder agreement.
How can we help?
There are a number of considerations if you are issuing equity in your business. We have expertise in advising on:
- The terms of the investment offer
- The terms of the investment agreement