using equity to raise capital?

padraic · Apprentice Joined: 23 Jul 2007 Posts: 4

We are planning some major renovations and extentions to our factory, the cost of which unfortunately exceeds our financial reserves. We do however have a healthy and solid balance sheet and there is no doubt that as a company we offer substantial "positive" equity. My question is whether we could use this equity to raise the necessary additinal capital for our projected development. What do you say?

penn · Apprentice Joined: 07 Apr 2007 Posts: 6

I am glad to hear that your business is so healthy and strong. And in particular, I am pleased to learn you are planning an expansion of your manufacturing capacity. Of course, such expansion shuld be warranted by serious market studies and background research, but also supported by a sound plan and... strong equity. Which seems to be your case. Therefore, there should be absolutely no difficulty for you to obtain additional finance although this means you will have to borrow and pledge part or all of that equity as collateral.

using equity to raise capital?

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