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Funding for Andy

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Submitted By KristiScott
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FUNDING FOR ANDY
KRISTI SCOTT
AMERICAN INTERCONTENTIAL UNIVERSITY

ABSTRACT
This paper focuses on the three types of funding for Andy for his business and which one out of the three is best for Andy.

So the main problem for Andy is to find out appropriate source of financing for his project. He can have many options available in the form of equity and debt to finance his plan mainly due his good reputation and financial performance in the past years. The three best options of funding for Andy would be: 1. Common equity 2. Debentures 3. Bank Loan
Common equity: It is a form of financing where a company raises funds from the public by giving him/her a share of ownership for the amount of fund provided by them. In this form of financing the holder of the company share has the ownership stake in the company and he/she is entitled for the voting rights in order to alter the company operations.
Debenture: Debenture is a type of debt instrument that is not secured by the assets of the company and is only backed by the reputation and creditworthiness of the company. As Custom Stitches and its owner Andy has a good reputation and also the company has good growth. Issuing debenture with good credit ratings could be a better option for the company. Here the buyer of the debenture has no voting rights and hence the creditors cannot alter the decisions of the company.
Bank Loan: Bank loan is another form of financing. Here the company can finance its plan by asking a bank loan from any reputed bank at its place. Bank loan can be cheaper for the company due to its reputation and performance also a great projection in his business plan can be the best part for the bank to issue him a low interest loan.
These three options can be used by Andy to give the company a new height. Andy can use a single option or can choose a mix of all to reduce the cost as well

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