How Corporations Raise Money

Issuing Stocks

A company can also go public and issue stock. When the stock is initially released, the company will receive money from the investors that bought the stock. This method requires the company to lose equity.

Taking out a Loan

A company can also take out a loan from a bank. The company will receive money from the bank and the company will have to pay it back in increments with interest.

Corporate Bonds

Companies issues bonds to investors. The investors pay a certain amount of money for the bond. The investors receive a fixed or variable interest from the company. When the bond reaches maturity, the company pays back the investor the original money paid for the bond.

Venture Capital

This is for small business or startup companies with a lot of potential. Investors, investment banks, or financial institutions give the company capital. The company gives the investor equity in return.