Raising & Restructuring Capital for Business

Raising and restructuring capital can be one of the keys to keeping a business float during tumultuous times. Whether your business is aggressively expanding or simply warding off unanticipated issues, capital is often what will make the difference between success and failure. In general, raising financing is always the preferred option for a business that lacks capital; restructuring occurs when the business cannot be sustained through its current practices.

Raising Capital for a Business

Raising capital can occur in many ways: taking on investor funding, procuring loans and lines of credit, acquisitions and mergers, and buy-outs. Regardless, the process of raising capital begins with a solid picture of the organization’s current income, expenditures, debts, and assets. When raising capital — however the capital will be acquired — the business needs to be able to show not only its present status but also its plans for the future and how this will grow or stabilize the organization. Analysts and consultants can aid the business in determining how much capital needs to be raised and how this capital should be appropriately used for the best business outcomes. Ideally, raised capital will go to specific improvements or expansion within the business, and the business should emerge stable or growing.

Restructuring Capital Within a Business

Restructuring capital is the best answer when a business simply cannot sustain itself with its current infrastructure. Often, such businesses cannot be sustained through raised capital, as there is a core issue within the company’s income and expense picture. Restructuring capital involves digging deeply within the business to understand its financial shortfalls and address them, by moving around debt and assets, reducing expenses and doing what is possible to increase the organization’s income. A capital restructuring will create a comprehensive plan for the company’s turnaround, including cost optimization, cost reduction, and exit planning. More significant restructuring processes may include the declaration of bankruptcy and insolvency. All of this can give the business the control it needs over its financial situation.

The process of managing capital can be a difficult one for any business — and either way, it requires accurate, timely bookkeeping and accounting records. To find out more about raising and restructuring capital for your business and how our corporate financial services can help you, contact the Toronto accounting experts at HSS today.