Debt Financing Advising

Debt Financing Advising

Sanjiv Gupta CPA specializes in structuring and raising capital for middle market companies. We are fully dedicated to meeting the debt financing needs of publicly traded, privately-owned and sponsor-backed growth companies. Our focus is on companies looking to raise money through creative financing solutions.

We structure and place various structured, senior and subordinated debt and equity products for borrowors with varying credit quality and sizes. Sanjiv Gupta CPA works to assist both the financial sponsors and borrows to address the financing needs in a cost-effective and timely manner.

What Is Debt Financing?

Debt financing is when companies raise money for capital expenditures or working capital by selling notes, bonds or bills to institutional or individual investors. Individual lenders can include officers, shareholders, directors, friends or family. In return for lending money, the institutions or individuals become creditors. They receive a promise that the funds will be repaid plus an agreed-upon level of interest. Although the term ‘debt financing’ has an undesirable connotation, many new start-up companies turn to debt financing to finance their operations. Even the healthiest balance sheets include some debt.

Debt Financing Advantages

  • Maintain Your Ownership: One of the major advantages to debt financing is that you will maintain ownership of your company. When you borrow money from a lender, you have an obligation to make all of the payments on time. However, that is where your obligation ends. You will then be able to run your business operations however you would like. Unlike equity financing, you will not have any outside inferences
  • Tax Deductions: In addition to maintaining your ownership, you will also qualify for tax deductions on the debt. In most cases, both the interest and principle payments on business loans are classified as business expenses. Therefore, they can be deducted from your company’s income taxes.
  • Reduced Interest Rate: When you are considering debt financing, you should analyze your federal tax deductions on the debt’s interest rate.

Speak with a Sanjiv Gupta CPA debt finance advisor to find out all of the benefits of debt financing.

Debt Arrangements

Most debt arrangements will involve a promissory note, loan agreement and guarantee. Contrary to popular belief, there is no such thing as a standardized loan agreement. Virtually all terms can be negotiated for any debt you take out behalf of your company. Sanjiv Gupta CPA will help you negotiate the best deal for your debt financing. We will help you work through various issues including:

  • Parties (including guarantors and co-signors)
  • Interest rate
  • Fees (including attorneys’ fees)
  • Terms of payment (including grace period, prepayment and late fees)
  • Use of loan proceeds
  • Collateral
  • Affirmative covenants
  • Negative covenants
  • Representations and warranties
  • Conditions to closing
  • Events of default

Sanjiv Gupta CPA debt financing advisors are here to help you determine the best way to raise capital for your business. Over the years, our trusted advisors have helped our clients find creative solutions including structured equity, convertible debt, second lien term loans, senior debt, mezzanine financing and “one stops”. We have extensive experience finding the best solutions for our clients.