Transworld M & A Advisors specializes in the facilitation of middle-market business transactions. This segment is comprised of businesses that are valued between $5 million and $100 million. We assist buyers and sellers that are interested in debt and equity financing, and we have a huge advantage in our corner.
Transworld Business Advisors was founded in Fort Lauderdale, Florida back in 1979. The company has been very successful over the years, and they have experienced exponential growth. At this point, there are Transworld offices in a number of different foreign countries and more than 30 states. We are a partner of Transworld Business Advisors, so we have all of this networking power, experience, and expertise to draw from when we assist our clients.
In addition to the utilization of profits to capitalize for the purposes of growth, there are two other widely utilized forms of financing: debt and equity financing.
Debt Financing
Many business decision-makers decide to utilize debt financing when they understand all the facts. The term is somewhat self-explanatory: You obtain debt financing by taking out a loan or attaining a line of credit. In a very real sense, it is not unlike the type of financing that people utilize to buy homes, cars, etc. The difference is that this type of financing is designed for the corporate community.
When it comes to taxation, the principal portion is not considered to be an operating expense for tax purposes. However, the interest payments would be operating expenses. An agreed-upon interest rate will be applied, and this is where the lender benefits. This being stated, if the infusion of capital results in increased profitability, the lender would not have any claim to a portion.
Equity Financing
The other form of financing is equity financing. Companies that go this route issue shares in the business to investors. They don’t have to go into debt and pay interest, and that is the good news. However, if the value of the business grows, the investors would share in the profits, and they could be considerable. On the other side of the equation, if the company underperforms, the investors may divest themselves of the shares, and this can decrease the value of the business.
Contact Transworld M & A Today!
If you would like to discuss debt and equity financing one of our knowledgeable consultants, we can be reached by phone right now at 888-864-6610.