New business owners in Beaumont and other parts of Texas may want to learn more about how a limited liability company can go about raising funds. There are some differences between what an LLC may do compared to a large corporation, and the sources of capital are different from a publicly-traded company. As an LLC, your challenge is finding investors who will take the chance of an investment in a smaller company.
Sell ownership shares to investors
To raise capital, you may want to sell shares in your company. This will bring in cash to your business with investors or additional partners. For this strategy to be effective, you will need a good business plan and presentation to show why buying into your company is a good investment. Business formation always benefits from a well-thought-out plan.
The flexibility of your LLC allows membership structure
When a new member invests in your business, you can specify how little or how much say they will have in the running of the business. The LLC operating agreement is where you specify these terms. New members may share differently from those investors who are already part of your LLC.
You may also borrow money
Debt financing is a commitment by your company to pay back the money. Since your LLC may not have been in business a long time, you may have to give up some of the LLC protection by personally guaranteeing the repayment of the loan.
Private sources may make small business loans; these lenders might be people who are already investors in your business. Friends and relatives may also loan money with a rate of interest that appeals to them. A private loan will involve less paperwork than a traditional loan from the bank.
If you are about to form a business or you have questions regarding an LLC, it may be a smart choice to consult an attorney with experience and a thorough knowledge of business law. They may help your business, regardless of its size, with the important legal aspects of daily operations.