Capital Structuring – What you need to know

By May 22, 2020Blog

At Advivo Accountants and Business Advisors we understand that every business needs capital, but not all businesses are the same nor are the types and sources of capital available.

 

We have years of experience in this complex field and can help you understand the factors that impact on your capital requirements. We will also ensure that you have the most efficient and applicable structure for your business.  It is very important not to confuse the right capital structuring with the cheapest option available..

When looking at the right capital structuring for your business it is important to ask yourself…

  • Can I afford the repayments?
  • What are the terms and conditions?
  • Will this structure restrict my businesses growth or inhibit from bringing in a partner at a future time?

As your business advisor we will take a full look at your business to understand all aspects such as any potential risks. Each business has its own risk profile driven by a range of factors including industry, maturity, scale, management expertise, client spread, product mix and diversity to name just a few. We will also review your business’s short and long term goals & aspirations and most importantly cash flow. Accurate and detailed long term forecasts are essential to ensuring your business’s capital structuring is done correctly!

Our corporate structuring process includes laying out and working through all issues together and then building the financial model that is most appropriate for your structure. Ironically that same process makes it easier to access the capital from the various sources so the process is a win-win.

That is why getting the “right” structure may seem laborious, but it is very important.

With the impact of coronavirus we are seeing the repercussions of poor capital structuring in businesses. If you are feeling uncomfortable with your current structure or would like a review, be sure to checkout our corporate advisory services and contact our office today on 07 3226 1800.

For more information about the importance of business forecasts and budgets, read our blog here.