February 2023 - Limra Assets

Alternative Financing for Business That Cannot Get Loan

By Nur SyafiqahBlog

As a business owner, getting financing can be hard and take a lot of time, especially if you want choices that will help your business develop. Businesses can grow and expand thanks to the fact that there are other ways to get the money they need to grow.

In this article we explore the various alternative financing :

Mezzanine Finance

Mezzanine finance is a popular alternative way to get money. Mezzanine finance is a type of financing that falls between debt and equity financing. It is usually used to pay for things like growth or buying other businesses, and private equity firms or mezzanine finance funds are often the ones who give it. Mezzanine finance can be structured as either a loan or quasi-equity, with the lender getting a portion of the company’s revenues in addition to interest payments.

Quasi-equity for growth companies

Another way for companies that want to grow to get money is to use quasi-equity. A sort of financing called “quasi-equity” gives companies the money they need to grow and expand. It can come in many different forms, such as preferred stock, convertible debt, and warrants, and is usually given by private equity firms or other institutional investors.

Unincorporated joint-ventures

Unincorporated joint-ventures are another popular financing option for businesses. An unincorporated joint venture is a sort of collaboration in which two or more people work together to reach a common purpose. This sort of finance is typically used to pay for real estate development projects, where several parties come together to share their resources and skills.

Convertible debt structures

Convertible debt structures are a sort of financing that lets organisations get money by issuing debt that can be turned into equity at a later date. Startups and early-stage enterprises that are not yet ready to go public but need money to grow commonly employ this sort of financing.

Preferred equity

Preferred equity is a way to get money that gives investors a guaranteed rate of return, like a bond, but also gives them the chance to get gains like those from stocks through dividends. Companies that want to grow typically use this sort of financing to get money without giving up ownership of their business.

Pre IPO financing

Pre-IPO finance is a sort of financing that firms get before they go public for the first time. (IPO). This sort of funding is generally given by private equity firms or other institutional investors. It is used to pay for growth and expansion activities in the time leading up to the IPO.

Monetisation of property assets

Business can get access to the value of their real estate holdings through another alternative form of financing: the sale of property assets. Companies who own substantial real estate assets but can’t get regular finance because of their credit score or whatever else sometimes employ this sort of financing.

Business acquisition financing

Business acquisition financing is a sort of financing that is used to pay for the purchase of another business. This kind of financing is usually offered by banks or other financial institutions. It can come in many various forms, such as term loans, lines of credit, and SBA loans.

Privatisation financing

Lastly, privatisation finance is a sort of financing that is used to pay for a private equity firm or other institutional investor to buy a public company. This kind of financing is commonly used when the firm being financed is undervalued or is in financial trouble.

Conclusion

In short, if you operate a business and are seeking for different ways to finance it, you have a lot of possibilities. Whether you are looking for mezzanine finance, quasi-equity, unincorporated joint ventures, convertible debt structures, preferred equity, pre-IPO financing, monetisation of property assets, business acquisition financing, or privatisation financing, there is a financing option that can meet your needs. If you can’t get money anywhere else, you could choose to ask a financial advisor or an alternative financing provider for help.

About Limra Assets

Limra Assets is a Shariah-compliant financing solutions financier that provides loans for property financing, SME businesses loans and gold investment. We offer a range of financing options to help individuals and businesses, including alternative financing for businesses that are unable to obtain funds. Our goal is to provide access to funds for investments in a Shariah-compliant manner that focuses on transparency, customer service, and competitive rates, Limra Assets can be a valuable partner in your gold investment journey.

If you’re interested in learning more about Limra Assets and our Shariah-compliant financing solutions for property purchases, gold purchases or business loans, please contact us for more information.

Disclaimer:

It is important to note that taking out a loans for any purchases and gold investment, whether through Limra Assets or any other lender, carries risks and should be approached with caution. It is important to carefully consider your financial situation and investment goals before taking out a loans, and to ensure that you fully understand the terms and conditions. Additionally, investing in gold carries its own risks and should be done with the guidance of a financial professional. This information and all external links are provided for educational purposes only and should not be considered financial advice.

February 21, 2023

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What is Mezzanine Finance ?

By Nur SyafiqahBlog

Mezzanine finance is a type of financing that offers businesses a hybrid form of debt and equity financing. This type of financing is generally used to bridge the gap between the amount of equity a business has and the amount of debt it can raise. Mezzanine financing can be a valuable option for companies that are seeking growth and expansion but lack the necessary funds to do so. Like any type of financing, mezzanine finance has its pros and cons. In this article, we’ll explore some of the advantages and disadvantages of mezzanine finance.

Pros:

Flexible financing: Mezzanine finance is a flexible financing option that allows business to customize the terms of the financing to suit their specific needs. This can be especially beneficial for businesses that have unique financing requirements.
No collateral required: Unlike traditional debt financing, mezzanine financing does not require collateral. This can be an advantage for business that do not have significant assets to use as collateral.
Access to additional funding: Mezzanine financing can provide businesses with access to additional funding that may not be available through traditional financing sources.
Can be structured to reduce dilution: Mezzanine financing can be structured to reduce the dilution of equity ownership. This can be beneficial for businesses that want to maintain a larger percentage of ownership.

Cons:

Higher interest rates: Mezzanine financing typically has higher interest rates than traditional debt financing. This can result in higher financing costs for the business.
Dilution of ownership: Mezzanine financing involves the issuance of equity or equity-like instruments, which can lead to dilution of ownership for existing shareholders.
Complexity: Mezzanine financing can be complex, and the terms of the financing can be difficult to understand. This can make it challenging for businesses to fully understand the financing they are receiving.
Limited options: Mezzanine financing is not widely available, and the number of lenders offering this type of financing is limited. This can make it difficult for businesses to find a suitable lender.

Mezzanine finance is available in Malaysia. It is offered by various financial institutions such as banks, investment banks, and private equity firms. The Malaysian government also offers mezzanine financing options for small and medium-sized enterprises (SMEs) through agencies like SME Corporation Malaysia and the Malaysian Technology Development Corporation (MTDC). Mezzanine financing is becoming increasingly popular in Malaysia as a way for businesses to access flexible and customized financing solutions that bridge the gap between traditional debt and equity financing. If you are interested in mezzanine financing for your business in Malaysia, it is recommended to consult with a financial advisor or attorney to explore your options and determine the best fit for your specific needs

Conclusion

In conclusion, mezzanine financing can be a valuable financing option for businesses seeking growth and expansion. However, it is important to carefully consider the pros and cons of this type of financing before deciding whether it is the right option for your business. It is always recommended to seek professional advice from a financial advisor or attorney before making any financing decisions.

About Limra Assets

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February 13, 2023

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