Where a company has a strong balance sheet and unencumbered assets then the option of a capital raise could be considered.
A capital raise is commonly used in mergers or acquisitions, whereby the balance sheet for each company is used to raise funds to complete or contribute funds for the purchase.
Capital raise is also used where a company is going through an event or transition and needs an immediate capital injection, however financials or bank statements do not as yet support traditional funding lines. Events or transitions can include:
- Mergers or acquisitions
- Impairments in trading performance
- Rapid expansion
- Invoice payment disputes
- Loss of supply contracts