The word financing can have different meanings to different people. For those that often borrow, financing means securing the money and capital needed to either stay afloat or engage in a new venture. For investors, financing is a form of investment where you essentially provide money to those who need it at terms that are acceptable to both parties.
Matching supply and demand
In other words, financing is a relatively simple concept. It’s about matching those who need money with those that can provide it. Financing has certainly evolved over time. As economies have advanced and modernized, financing moved from private and select transactions to essentially institutionalized exchanges of capital. That’s what the banking system has become, hasn’t it?
But, as with so many aspects of life, we’re coming full circle again as we see private forms of financing becoming increasingly more common. There are many reasons for that. In a nutshell, public financing has become highly regulated, highly predictable and, as a result, highly cautious, too. So, people have turned to private forms of financing.
Finding unique opportunities
Again, there are two sides to the financing equation. On one side, there are those that are seeking sources of money and capital. On the other side, there are those seeking to invest money and capital. So, when private financing is involved, these types of arrangements tend to be very unique, less compliant with rules and regulations, and more open to higher returns.
In fact, private financing has grown so much that the Canadian federal government even has an entire website section dedicated to the sector. From private debt and equity, commercial term loans and lines of credit to microcredit, commercial mortgages and angel investing, the number of ways that individuals and organizations can transact in private investing is as infinite as one’s imagination.
ASCEND GRP is an asset-management firm, with offices in Toronto, Richmond Hill, and New York, that services clients seeking investment opportunities worldwide.