Need Insight Into Raising Money Through Bonds?
Currently we are seeking startup capital for a company however, prior to starting the company we are building a state-of-the-art facility. We are seeking any source of funding but, are specifically looking into raising bonds. A few points: the bonds can be fully collateralized by land on which the plant and company will be situated on, we are seeking $500k, a full(200+ page business plan) exists.
We have a basic understanding of bonds however, no one on the team has experience with bonds therefore, we are seeking insight into the specifics of putting together a package we can begin to sell to investors.
A few Questions: What qualifications must a person have in order to package and sell bonds? Although raising money through bonds might not be common for startups, given the parameters I have given on the deal, Is this something that could be put together?
Thank you for your help.
You need to speak with an investment banker, but I can tell you the float is too small for a public bond offering. The fees would be huge.
You should talk with a corporate banker who is familiar with your company and business plans. You also could approach some angel investors and/or private insurance companies who float private debt. $500k is not enough for most institutional investors to get into.
>>>What qualifications must a person have in order to package and sell bonds?
In order to sell bonds to public, you must be a securities dealer licensed in each state where the customers you are contacting live.
>>>Question you didn’t ask: What qualifications to the bonds have to have?
In order to sell bonds to public, the bonds must be registered with the SEC.
So, how many months (years?) are people in your company will to work toward licensing examinations? And how many tens (hundreds?) of thousands of dollars re you willing to spend on compliance costs? Remember, the lawyers charge by the hour, not by the size of the deal.
>>>raising money through bonds might not be common for startups
Now you see that there is a reason for this.
>>>fully collateralized by land on which the plant and company will be situated
Go to a bank. What you are describing is a simple commercial mortgage