Investment Banking and Investment Firms
August 31, 2022
by a searcher from Brigham Young University in Salt Lake City, UT, USA
What has your experience been like receiving funding from investment banks and investment firms vs traditional bank financing on projects or acquisitions? In talks with some firms and wanted to get a grasp from those who have had experience with that type of funding.
from University of Notre Dame in Dublin, OH, USA
With that said, there are some investment banks that toe the line and do some investing in addition to their advisory services. Sometimes these groups will be called "merchant banks". In this case, the "funding" is in the form of equity, and would be comparable to a private equity firm or LP co-invest.
Traditional bank financing will of course be in the form of debt. If conventional, there are asset-based and cash flow-based credit facilities. There is also the SBA program to consider. In any case, the cost of capital will be cheaper than equity but there will be limitations on your flexibility.