Rahastamisstruktuure

Rahastamisstruktuure, meaning financing structures in Estonian, refers to the various ways in which a company or project can raise capital. These structures are essential for business operations, expansion, and investment. They can be broadly categorized into debt financing and equity financing, and often involve a combination of both.

Debt financing involves borrowing money that must be repaid with interest. This can include bank loans, bonds, or lines of credit. Companies using debt financing maintain ownership but incur a fixed obligation to repay the principal and interest. The terms of the debt, such as interest rates and repayment schedules, are crucial aspects of these structures.

Equity financing involves selling ownership stakes in the company in exchange for capital. This can be done through issuing shares to private investors, venture capitalists, or through an initial public offering (IPO) on a stock exchange. Equity financing does not require repayment like debt, but it dilutes existing ownership and can involve sharing profits with new shareholders.

Hybrid financing structures combine elements of both debt and equity. Examples include convertible bonds, which can be converted into equity under certain conditions, or preferred stock, which may have features of both debt (like fixed dividends) and equity (ownership). The choice of a particular financing structure depends on a company's financial health, growth stage, risk tolerance, and the specific needs of the capital being raised. Understanding these structures is vital for financial planning and strategic decision-making.