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Choosing the Right Capital Structure for Your Business

  Howard Goldman, Partner, CFO Edge, LLC  
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  Article Summary  
Faced with the need to raise capital for growth, more inventory, more employees, or expansion, Los Angeles and Southern California business leaders have a number of options when choosing the right capital structure for their businesses.

Determining whether debt, equity or retained earnings is the right capital acquisition strategy depends on specific circumstances and properly analyzing the options.

Discussed in this article are three main capital structure or capital acquisition strategies - debt, equity and retained earnings - as well as some of the pros and cons of each one.

Many factors contribute to the decision when choosing the right capital structure, but there is one constant: reliable and credible financial statements and forecasts. Whether the choice is to work with lenders, investors, or retained earnings, accurate financial data and projections are essential.

Business leaders weighing alternative capital structures can benefit from working with an outsourced CFO services provider who will bring a high level of financial sophistication, as well as a proven track record choosing the best capital structure and negotiating fair terms with lenders or investors.

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