Two Paths to Acquisition Capital

So you've grown strong enough to buy another company? Financing means debt funding or private equity. Here's how to choose

Q: Our five-year-old company has a proven track record. We have three locations and generate millions in annual sales. We would like to expand by purchasing some existing companies. How can I go about gathering the capital necessary to expand?

-- J.B., Northern California

A:

In your situation, companies generally follow one of two paths: securing debt funding or private equity funding. (A third option might involve seeking capital through an initial public offering, but that's less common for a small business.)

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