To address the needs for working capital, we can help you secure funding via debt or equity financing. For debt financing, we can help find the most competitive program in asset based lending, corporate bonds or convertible debentures.
For equity financing, we specialize in Regulation D private placements and private investment in public equity.
Asset Based Lending
Asset based lending (ABL) is any kind of lending secured by an asset. ABL facilities are typically revolving line of credits that tie to business’ assets such as inventory, accounts receivable, machinery and equipment. This type of financing can be obtained quickly often with less stringent qualification and lending covenants. It’s a viable financing method to help create cash flow to businesses when traditional means of financing such as debt/equity offering, unsecured loans, or mortgage backed bank lending is not available.
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Corporate Bonds
A bond is a debt security issued by a company, in which the company owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest at fixed intervals and/or to repay the principal at a later date.
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Convertible Debentures
Convertible debenture is a type of bond that can be converted into stock in the issuing company usually at a pre-defined ratio. This type of bond usually has a low coupon rate since the holder is compensated with an option to convert the bond into the company common stock typically at a discount to market.
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Regulation D (Reg D) Private Placements
Under the Securities Act of 1933, any offer to sell securities must either be registered with the SEC or meet an exemption. Regulation D contains three rules (504, 505, and 506) providing exemptions from the registration requirements, allowing some smaller companies to offer and sell their securities without having to register the securities with the SEC.
While companies using a Reg D exemption do not have to register their securities and usually do not have to file reports with the SEC, they must file what’s known as a "Form D" after they first sell their securities. Form D is a brief notice that includes the names and addresses of the company’s executive officers and stock promoters, but contains little other information about the company.
Rule 504
Rule 504 provides an exemption for the offer and sale of up to $1,000,000 of securities in a 12-month period. The company may use this exemption so long as it is not a blank check company and is not subject to Exchange Act reporting requirements.
Rule 505
Rule 505 provides an exemption for offers and sales of securities totaling up to $5 million in any 12-month period. Under this exemption, securities may be sold to an unlimited number of "accredited investors" and up to 35 "unaccredited investors"who do not need to satisfy the sophistication or wealth standards associated with other exemptions.
Rule 506
Rule 506 provides an exemption for offers and sales of securities in an unlimited amount.
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Private Investment in Public Equity (PIPE)
A private investment in public equity involves the selling of publicly traded common shares or some form of preferred stock or convertible security to private investors. The shares are typically sold at a discount to market value. A PIPE offering may be registered with the Securities and Exchange Commission on a Registration Statement or may be completed as an unregistered private placement.
This financing method is attractive for small to medium-sized public companies due to the relative efficiency in time and cost of the transaction compared to more traditional forms of financing such as secondary offerings.
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