Debt finance in us of small companies, Finance Basics

Debt Finance in US of Small Companies

Why It CAN Be Difficult For Small Companies to Raise Debt Finance in US

  1. Lack of safety
  2. avoidances of finances available
  3. Most of them are dangerous businesses like there is no feasibility studies done as chances of failure have been place to 80%.
  4. Their size being small tends to create them UNKNOWN that is they are not a important competitor to the big companies.
  5. Cost of finance may be high - their market share may not permit them to safe debt.
  6. Small loans are expensive to extend via bank via administration costs are very high.
  7. Lack of business principles such is sound and not easy in evaluating their presentation.

Solutions to the Above Problems

 

  1. There should be diversification of securities as an example of to accept guarantees.
  2. Education of those businessmen on sound business principles.
  3. The government must set up a special fund to assist the jua kali businessmen.
  4. Encourage configuration of co-operative societies.
  5. To ask for bankers to follow up the need of these loans.

 

Posted Date: 1/29/2013 4:47:09 AM | Location : United States







Related Discussions:- Debt finance in us of small companies, Assignment Help, Ask Question on Debt finance in us of small companies, Get Answer, Expert's Help, Debt finance in us of small companies Discussions

Write discussion on Debt finance in us of small companies
Your posts are moderated
Related Questions
Imagine Joy is the sales manager in a computer retail company and has summarized for each sales transaction the following information: Sales person Date of sales Uni


Asset: - An asset stands for an item of value owned and controlled by an organization which can generate revenue for the organization or can help in generating the organization re

Secondary Markets - Financial Markets Economic Benefits or Role of Secondary Markets in the Economy are as: 1. It provides people a chance to buy shares therefore distribut

Price Earnings Ratio Valuation P/E ratio is traditionally employed for valuation of shares however it is an important ratio in the valuation of business. The P/E ratio is the

Information Signaling Effect Theory Advanced via Stephen Ross in year 1977, He argued such in an inefficient market; management can utilize dividend policy to signal significa

Development Banks and Financial Institutions There are some sectors in the economy such may not secure adequate funds from commercial banks for different motives. a) May re

Interest Rate Levels and Stock Prices Interest rates contain two effects on corporate profits: a) Since interest rate is a cost, and like the higher the rate of interest the

Ask questConsider an 8% coupon bond selling for $953.10 with 3 years until maturity making annual coupon payments. The interest rates in the next 3 years will be, with certainty, r

Question 1: (a) (i) What are Asset shares? (ii) State the purpose of calculating Asset shares. (b) Outline the five uses of policy Asset shares? (c) Lif