Most of us are aware of the broadest categories of financial capital which are debt and equity. But underneath these broad categories things are getting more and more creative to satisfy the needs of business owners and investors.
Debt has traditionally been bonds or loans, but now there’s first lien or senior secured, second lien or subordinated debt, asset-based lending, hard money lender’s and even factoring or leases.
Since I spent 20 years financing food and agribusiness companies, I’m going to dive deeper into each one of these types of debt, when they are best used, and what the typical terms are. I’ll even introduce you to some of the traditional and nontraditional players out there offering these type of products.
Under the category of Equity - this has also become increasingly diverse and complex. What was traditionally majority stock equity ownership, has developed into various types of minority interest, preferred stock, venture capital and angel investing. My partner Mark Campbell has extensive experience in these areas and he is going to do the same deeper dive into each of these subcategories.
By the end of the series you should feel much more confident in knowing what all is out there, and when to properly use each kind.
At Finance of Food we focus on food in agribusiness companies, but this subject is universal for all business owners who want to grow their business sustainable, and especially if you’re approaching an exit or some other form of transition.
We hope you find these topics valuable, and we would like your feedback. Please let us know if you have a specific source of Capital you want highlighted, and we would appreciate suggestions for topics to cover in the future. See you again soon.