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Choosing Between Debt Or Equity Finance

The reality is that most businesses will require a capital injection at some stage in their business life-cycle. By Gareth Owen

Sasfin

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Businesses tend to trade in cycles. Assuming an existing business model makes sense, there is generally an initial investment in the form of a shareholder or bank loan followed by a growth phase.

Once this growth phase matures, a further investment is necessary to achieve continued growth, either in the form of a working capital injection, or a property plant and equipment improvement, in order to avoid a growth plateau.

One size does not fit all

The size and scale of an investment required may vary depending on the life stage of the business.

While it may be sufficient to fund this expansion through the balance sheet initially, it is inevitable that a larger investment will be required, which usually entails a cash injection from an external source.

This can come in the form of either debt or equity capital. For the growth phase to be implemented successfully, it is crucial to understand which source of funding is suitable for the business at the time of the capital injection.

Related: The Myriad Benefits Of Venture Capital Investing

Unpacking finance through debt

Debt financing can be the quickest and easiest means for the cash injection, however it does come with some downside. Making use of a debt facility will result in term repayments as well as interest, sometimes at hefty rates depending on the loan size and term.

This will likely have a negative effect on cash flows in-the-short-to-medium-term, raising the break-even point which immediately removes the possibility for debt finance for businesses which are near break-even point or whose trade tends to be cyclical.

However, because there is no change in shareholding, the returns at the maturity of the growth phase, once the debt has been paid off, will not be diluted.

In the case of cash flows not being a concern, the interest expense incurred in conjunction with the loan can also be used to reduce the company tax owed to the taxman.

The case for equity finance

Equity financing, where the cash injection is received in exchange for a relative shareholding in the business can be useful in unlocking far more value than debt under the right circumstances.

While debt can quickly accommodate a short-to-medium-term growth phase, the long-term benefits of finding the right equity partner can prove to be invaluable in achieving the businesses’ long-term growth plans, often by leveraging the new business partner’s synergistic business attributes.

Related: Determining The Value Of Your Business

The downside to equity financing is that the initial returns will be diluted as the new shareholder will be entitled to their portion of the earnings, however if one takes care to select the correct partner and advisor, the long-term returns of an equity partner can far outweigh the initial earnings dilution.

Partnering with the right adviser to determine the best source of external funding can ensure a positive outcome in the critical growth phase of a business.

Sasfin Corporate Finance focuses on providing innovative commercial and banking solutions to our clients. As an accredited sponsor and designated advisor with the JSE, we offer our sponsor and designated advisor clients independent advice on a full range of corporate finance transactions including advice relating to continuing obligations in terms of the JSE Listings Requirements. Sasfin Capital is a division of Sasfin Bank Limited, a subsidiary of Sasfin Holdings which listed on the JSE in 1987

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HP Launches New Ink Tank Printers For High-Volume Home Users

New HP DeskJet GT Series offer high quality printing at an extremely low cost-per-page.

HP

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HP Inc. unveiled the new HP DeskJet GT 5820All-in-One series targeted at high-volume home users looking for a wireless ink tank printer that never stops. This wireless all-in-one prints thousands of pages, all at an ultra-low cost-per-page. Our easy-access, spill-free refill system means no more mess, just exceptional quality and reliability for all your high-volume home printing needs.

“High volume home users are focused on efficiency and are constantly on the lookout for innovation that can reduce cost and minimise disruption to their work,” said Jane Geypen, HPS Category Manager for South Africa. “The new HP DeskJet GT series makes high-quality, reliable printing more affordable and wireless printing and ink refill easy and fuss-free.” 

Related: Why You Need To Be Using The HP GT 5820 In Your Business

Longer staying power, renowned quality

The HP DeskJet GT series prints up to 8,000 pages with a set of three HP colour bottles or up to 5,000 pages with a HP black ink bottle out of the box. Original HP inks are specially formulated to deliver sharp text, vibrant graphics and photos that are water and fading resistant, while also offering professional quality and borderless printing.

Replenishing ink is also clean and easy with HP’s innovative spill-free refill system. The bottles can simply be plugged into the tank without any squeezing required. You can also easily monitor ink levels with the transparent ink tanks.

Connect wirelessly and work from anywhere

The working environment today needs to be connected and wireless. The new HP DeskJet GT 5820 All-in-One printer makes it easy for you while working remotely to connect via a smartphone or tablets. The printer can be set up out of the box using just a mobile device. Even without a wireless network, Wi-Fi direct enables you to directly connect your printer to your mobile device at home.

Related: 3 Unique Paths To Improving Office Productivity

In addition, with the HP All-in-One Printer Remote app, you can quickly send scans to email or cloud storage through your mobile device. You can easily print from a variety of devices including iPhone® and iPad® using AirPrint™, or smartphones and tablets running Android™, Windows® 8, Windows® 10, and Google™ Chrome™ operating systems. 

Quick, easy setup

The HP DeskJet GT 5820 All-in-One comes with a set of three Original HP GT52 colour ink bottles, plus an Original HP GT51 black ink bottle, so you can set up fast and start printing right away. High-yield HP GT51/52 ink bottles are the perfect match for high-volume printing. Original HP inks are specially formulated to work with the all-in-one, and ensure that printing is simple and reliable, with amazing results every time.
More information about the new HP DeskJet GT 5820 All-in-One series is available at http://www8.hp.com/za/en/home.html 

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Why You Need To Be Using The HP GT 5820 In Your Business

Extremely low cost per page. Innovative high-quality printing. Everything you’ve come to expect from HP.

HP

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HP GT 5820

HP recently launched their GT 5820, this All-in-One printer is ideal for high-volume users or small- and micro-businesses who need low-cost, high-volume printing. If you need to be able to print on-the-go the GT 5820 can give you the freedom to print from your smartphone or tablet, the 5820 model offers easy mobile printing options.

No matter which model you choose, you’ll get:

  • Affordable high-volume printing
  • A clean, easy refill experience
  • Easy monitoring and maintenance, with minimal intervention
  • Consistent, high-quality results for everyday documents and photos
  • Borderless printing for brochures, flyers, photos, and more
  • Convenient, quality copying and scanning.

Higher stamina at a lower cost

The new and innovative GT 5820 can handle high-volume printing, affordably. It can print up to 8,000 pages (colour set) or 5,000 pages (black), with extremely low cost per page with high-volume printing. You can print thousands of pages with the new and improved high-capacity ink tanks, and whenever you want you simply add more ink.

Related: How To Make Better Business Decisions That Drive Productivity And Profits

User-friendly ink refill system

Restore ink levels with our easy-access, spill-free refill system. It will help you to improve your workflow with productivity features and print longer without having to replenish ink. Monitor ink levels with transparent ink tanks, and easily replenish whenever you like with Original HP high-yield ink bottles.

You can now avoid messy overflow as HP’s unique spout design prevents ink from filling past the tank’s maximum fill line. Simply plug the bottle into the ink tank and let it drain, no squeezing, no spilling.

Exceptional HP quality

With the GT 5820 you can print crisp, sharp text, vibrant graphics, and so much more. If you’re looking for consistent, professional-quality results try using the world’s No. 1 printer brand.

This all-in-one is designed and built to HP’s high standards for reliable, long-term use.

The GT 5820 will help you to produce standout everyday documents with sharper lines, darker blacks, and reduced smudging on ColorLok® papers. Rely on Original HP inks for durable colour photos that resist water and fading, and last for decades. You can be sure your projects always look great no matter what you print. Create borderless brochures, flyers, photos, and more, right in your office.

Get the features you need for work and other tasks, in this all-in-one, including copy and scan functions, so you can save time and accomplish more using just one device.

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4 Accounting Online Learning Courses From ACCA You Can Take For Free

We aim to provide you with the world’s best online courses in accountancy, finance and business, equipping you with the skills to start or supercharge your career.

ACCA

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ACCA-X is developed by ACCA (the Association of Chartered Certified Accountants), the world’s most forward-thinking professional accountancy body. Our online courses are hosted on the edX.org platform.

We aim to provide you with the world’s best online courses in accountancy, finance and business, equipping you with the skills to start or supercharge your career.

Our values:

We love accounting

We believe that high-quality accountancy tuition should be available to everyone. That’s why our introductory and intermediate online courses are free and can be accessed anytime, anywhere.

Related: Acca Launches Its New Tutor Excellence Programme

Being part of something bigger

At the heart of ACCA-X is our community of learners from all over the world. Our online community culture encourages collaboration and learners helping each other.

ACCA-X online learning programme offers the following free online courses:

These courses are 6 week long and ‘on-demand’ so you can start at any time you wish.

Do you have love and passion for Accounting? Do you want know how you can be part of something bigger?

Don’t hesitate to contact Linah on 011 459 1904 or email her on Linah.Thaba@accaglobal.com

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