Structured Financing: An Introduction For Growing Business Owners
As a business owner, you already know that your financial needs are far different than the average consumer, which often means you cannot go for the same types of loan products or even get help from ordinary lenders. However, as your business grows in size, so do your financial needs. Therefore, there may become a need for structured financing services, such as Mcdonald Financial Corp. If you are a relatively new business owner who has experienced a massive growth in a short amount of time, the idea of structured financial services may be foreign to you. Take a look at some of the most common questions about structured financing and the answers you will need to know moving forward.
What exactly is structured financing?
Structured financing is a form of lending that is available for large businesses and corporations when traditional loan products would simply not be substantial enough to be a feasible offering by a lender. Structured financing is not just one loan, but usually the collaboration of several loans and investments into the company by third-party business professionals or companies. In many cases, structured financing involves multiple transactions and investments instead of only one because the needs of your growing corporation are so broad.
What are the advantages of structured financing for a growing corporation?
There are a handful of advantages that are noteworthy with structured financing for a growing corporation that you should know. Primarily, the advantage is that a lending option becomes available when there otherwise may not have been an option for funding. However, structured financing also:
- structured financing is fitting for complex markets
- structured financing, when done properly, can yield a valuable investment into the further growth of your business
- structured financing lowers risks that can be associated with typical loan products of a large amount
What is the difference between structured financing and securitization for a growing corporation?
Even though structured financing and securitization are often mention in the same breath by financial advisers, these are two different forms of corporate support. Securitization involves the use of combined financial assets that are sold off to interested backers, while structured financing is not so intrinsically risky for a corporation and can involve fewer investors. Often times, securitization is the starting point that leads to structured financing, however, especially for a business that does not yet have enough fluid income to cover the costs that can be associated with financing.