Whilst commercial lawyers may not provide detailed financial advice along the lines that accountants or tax lawyers might do, however Rowe Bristol Lawyers are an important source of advice when it comes to certain financial transactions a business might enter into, especially concerning the legal implications of them.
One such financial transaction is when a business seeks and receives a loan or other form of credit, where the lender requires security on the loan. This is akin to a mortgage company securing the mortgage they lend a homeowner to purchase their home against that property. In this article, we will explore secure business loans and specifically outline the three main types of security that banks and other lenders will normally accept.
Why Businesses Need To Raise Capital
There are several reasons why a business may need to raise capital in the form of a loan, credit, or even a mortgage. In addition, borrowing in whatever form it takes is far more common within the commercial world than many people realise. The view is that, given many companies are worth millions of dollars they would not need to borrow money, but that is a mistaken assumption.
Even for a corporate giant, much of its worth might be in stock, land, commercial properties, machinery, and intellectual property to name but a few, and it is often the case that its liquid assets, aka cash, are low by comparison. This can also apply to small businesses on a much lesser scale, but the principle is still the same. If a business, large or small, wishes to raise cash, then the main option they have is to borrow it. That cash could be required for the following reasons: