Research Paper Essay Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Research Paper Essay Case Study Analysis

Raise Finance for Bio-Pharmaceutical Company

With regardstothe bestsource of funding the new business, I would choose debt financing among other alternatives to fund my new business –African-based Bio-pharmaceutical Company whose leadership would comprise seasoned practitioner in the healthcare and pharmaceutical industry. It would be an indigenous organization with the aim of utilizing the resources for delivering the affordable and high quality medical, pharmaceutical and medical products. It would provide a variety of medicines to patients to improve their quality of life.

The reason behind selecting the debt financing over other modes of financing options includes; the owner retains the right to run the business operations and the obligation of debt ends on making the agreed-upon payments, the cost of business could be deducted as an actual expense of business.Hence, resulting in lower income tax liability, which tends to save more money of company, and there would be no stipulations on how the company uses the cash from debt financing. Also, in debt financing, the bank would have no control over the business and after paying the debt amount back, the relationship of the company with bank would end. The tax deductible interest would easy to forecast the expense, due to the fact that loan payment do not fluctuate, which indicates that this mode of financing would be beneficial for the company. In would require minimum number of documents in order to process a debt and fast turnaround in processing the request of loan.

In addition to this, the debt financing generates huge returns and small businesses perform better at all stages of lifecycle under bank credi,t due to being answerable to and monitored by banks (Keasey, 1990). For the average small business, the debt financing is more practical, quicker and easier. Also, there is a significant barrier to entry to the venture capital or equity mode of financing – investors only get involve in the multi dollar deal and expect a big return on their share or investment.

Steps needed to take to raise the desired amount of funds

Raising funds through a loan is most common option for the small businesses. It is significantly important for the small businesses or startups to know the necessary steps to get the loan from financial institutions. By doing so, the chances of getting the approval would increase. Here are some steps that are considerably important to follow when taking loan from banks;

With the consideration of securing the loan or debt, many banks or financial institutions require the company to have a robust financial plan, which brings out what the small business would entail. It forms an introduction about what the business is all about. The proposed business plan should be capable enough to state the mission and goals of the company & how it would be operated to achieve all the stated goals and objectives.The great business plan demonstrates that the business would be succeeded in accordance with the mind of lender.
Banks or financial institution have the tendency to evaluate how the applicant of loanwould spend the borrowed capital or funds. If the business desires to buy the equipment or machinery; it would need to apply or request for the machinery loan. On the other side, if the business needscapitalto keep the business operations running before the debaters of company would pay it, it is suggested to request for the short term debt. Hence, stating what the loan would be used for makes it easy for the financial institution to assess whether or not the requested or applied amount of capital would meet all the needs.
When requesting for the debt, the small business would need to have a thorough research for the purpose of mitigating the overestimation or underestimation of the amount of requested capital. This is because the underestimation would likely lead to the financial concerns in the forthcoming years. On the other hand, the overestimation would make the bank question whether the research was conducted before writing the financial plan of the business. Having a good budget is required with complete financial estimations to avoid these doubts.
In current era, the banks or financial institutions prefer to verify whether the applicant is eligible to obtain the bank loan or not. When requesting for the financial aid, the business needs to check its personal credit scores of reports. If the credit score is 700 and beyond it, it is considered excellent and if the score is below 680, it would be challenging for the business to obtain the bank loan. In case of having low credit score, the business would need to work hard and increase it before its requests for the debt.
Monitoring personal credit and business credit in regular basis is important because any error in the credit report would negatively affect the credit score of any company. If the business finds any error in the credit report, then it business would have to immediately contact a credit reporting agency to raise and rectify the score by omitting the discrepancies otherwise, the bank would not approve the debt request in case of low credit rating.
After assessing the credit report, the business would need to take some time to research and enlist some banks that seem viable to extend the form of debt that the business is in need of. The business should selectthebankthat offers debt at low rate of interest as well as offers most flexible approval guidelines.

Having a complete and proper financial statements allows the business to easily get loan from banks, because every single financial institution wantsto assess its income statement, cash flow statements and balance sheet to determine whether the business is capable enough to repay the loan...........................

This is just a sample partical work. Please place the order on the website to get your own originally done case solution.