Business owners overlook when they favor equity financing

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Reference no: EM131943572

Ever since the recent financial crisis introduced the general public to the pitfalls of excessive leverage within the financial system, there’s been a common misconception that “leveragability” for corporate borrowers may have been fundamentally altered. However, lending in today’s environment remains robust and is driven by the same fundamental analysis that occurs across financing cycles – stability and predictability of a company’s cash flow, coupled with the market value of core assets, remain vital to any lender’s underwriting. So, with a relatively more stable market environment, companies that have survived and thrived in the post-crisis environment are well positioned to access the vast amount of underutilized debt financing that’s available. Nonetheless, equity financing remains a very appealing option for many.”

Why is it so appealing? What do many business owners overlook when they favor equity financing?

Reference no: EM131943572

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