2023-04-27 11:00:09
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Financial management is one of the essential activities for the success of a business. In this sense, the process does not need to involve only the money obtained from billing. Instead, it is possible to resort to raising financial resources to meet different needs of the company.
In this case, it is worth getting to know the solutions on the market and understanding what are the differences between them. Thus, it is easier to take advantage of what is most appropriate for the moment and for the business objectives.
In this article, you will discover how fundraising works for companies to make more aligned decisions to implement the company’s strategies.
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How important is fundraising for companies?
The raising of external resources can be carried out for several reasons, such as the search for working capital. In this case, the business manages to have the necessary amount to keep its operations running.
In addition, the funds raised can be used for the enterprise to expand or implement other projects. The money can also help to make or extend the payment of more urgent debts, collaborating with the maintenance of operations.
What are the fundraising alternatives available on the market?
Now that you understand why companies choose to raise external financial resources, it is worth understanding how this can be done. In practice, one of the possibilities is to resort to banking market solutions.
They involve lines of credit offered by financial institutions, such as loans and financing. From them, the company is able to raise funds for specific activities, such as acquisitions or availability of working capital.
However, one must consider that these may not be the best alternatives for all businesses. After all, they predict the payment of high interest rates that increase the company’s debt.
In addition to bank loans, it is possible to receive investment from a partner, angel investors or venture capital funds, for example. Thus, investors offer resources in exchange for a percentage of the company and can participate directly in its management.
Still, there is the chance to raise funds via the capital market. Through securities, companies access investors and receive money from them. As you will see, this can be an interesting alternative for companies.
How does raising funds via the financial market work?
Fundraising via the capital market is among the main and most advantageous options for companies. Among the positive points is the variety of solutions available to obtain the necessary amount and the most attractive conditions.
Therefore, it is worth knowing which are the main alternatives in the financial market and how it is possible to take advantage of them in business management.
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Debentures
To find out what the capital market solutions are, it is worth starting with fixed income. This is a class of investments whose return logic is known in advance.
Among the options are debentures, which are debt securities issued by non-financial corporations. Therefore, public and private companies can carry out this issuance, as long as the security is duly registered with the Securities and Exchange Commission (CVM).
As debentures are fixed income securities, they can present three different types of profitability. Are they:
- prefixed: defined by a fixed annual rate, known before the investment;
- postfixed: accompanies the variation of a reference indicator, such as the Interbank Deposit Certificate (CDI);
- hybrid: composed of a fixed rate plus the variation of an indicator, such as the Extended National Consumer Price Index (IPCA).
It is worth noting that the company can define the security’s profitability, maturity and liquidity characteristics. Thus, payment to investors takes place according to the agreed terms.
CRI e CRA
When you got to know the debentures, you accompanied a security that integrates private credit, a subdivision of fixed income. This classification also includes the certificate of real estate receivables (CRI) and the certificate of agribusiness receivables (CRA).
These bonds are issued by securitizers — financial institutions that acquire the credit rights of companies. In this case, the securitization company anticipates, with a discount, the accounts receivable from a company and starts to hold its credit rights.
These rights undergo a securitization process to be transformed into fixed income securities. Afterwards, they are offered to investors through the capital market. The return, in general, is obtained before the payment of the customers of the transferring company.
It is worth noting that the CRI and the CRA are related to companies in the real estate and agribusiness sectors, respectively. In addition, they have Income Tax (IR)-free income for individuals, which can attract investors.
business notes
Commercial notes are credit instruments that can be issued by corporations, limited liability companies and cooperatives. Through them, the company assumes a debt to the investor, who becomes the creditor of the amount.
The issuer of the commercial note defines the conditions for payment, such as:
- profitability;
- deadline for redemption;
- salary and other points.
IPO
So far, you have seen fixed income solutions for raising financial resources. However, it is also possible to carry out the process through variable income. One of the alternatives includes the initial public offering (IPO).
This procedure consists of going public on the stock exchange. From this stage, the company starts to trade its shares in the market and, at that moment of debut, receives the resources contributed by the investors in the purchase of the shares.
A differential of this alternative is the fact that it is not necessary to commit to paying interest, as with debt securities. However, the company opens its capital to investors interested in becoming shareholders and participating directly in the business and its results.
How to access these opportunities?
As you have seen, there are several solutions for raising financial resources for companies. The capital market, in particular, offers options for enterprises of different sizes and with different needs.
To access capital market opportunities, however, it may be interesting to have professional help. With the team of Renova Investit is possible to get to know each opportunity better and be helped to choose what makes sense for the business.
Thus, there is a way to understand what are the necessary steps to issue the securities and obtain the desired resources.
As you have seen, raising financial resources by companies can be done in several ways, including through alternatives available in the capital market. Thus, it might be worth considering turning to these solutions to take advantage of the advantages they offer.
Is it clear how fundraising can take place? For more information regarding the financial market, talk to a professional Renova Invest
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