Commercial Collections Blog

Raising Capital Though Bad Debt

An important decision for a business wanting to raise capital is that of choosing among the various ways to structure financing. Bankers and investment bankers may offer a number of possibilities besides straightforward bank debt, which is basically a loan that can be a fixed term loan or a revolving line of credit. Other possibilities bankers may offer include convertible debt, which is debt that may be converted into equity at some predetermined price per share. Mezzanine debt, which is senior to equity but subordinate to convertible debt, typically has a term of three to five years and often requires warrants or stock options in addition to substantial interest rates on the notes. Equity financing includes preferred equity and common equity. Preferred equity is stock that has certain preferential rights higher than common equity, which in turn is the sale of ownership of the company that issues the equity.

Debt Collection News

  • Businesses' revenue declined 2.6% in the last three years

    December 14, 2017
    This performance was driven by an increase in the time taken to collect cash from sales (Days Sales Outstanding) and an inventory increase (Days Inventory Outstanding), partially offset by an increase in the time to pay creditors (Days Payables Outstanding) that might not be sustainable in the long term, ...