Creative And Strategic Legal Guidance

Finding The Financing To Make Your Goals A Reality

Securing business financing while remaining in compliance is critical for any company. When you need trustworthy legal advisers for this critical activity, you will find them at Huck Bouma.

Established in 1980, our firm serves business entities and individuals throughout greater Chicago. Our business startup attorneys assist entities of several sizes in several industries. We can assist you with:

  • Securing bank loans
  • Securing Small Business Administration (SBA) loans
  • Adding investors
  • Drafting and reviewing purchase and sale agreements
  • Selecting a business entity
  • Finding equity financing
  • Evaluating tax implications of raising capital

We combine the sophisticated counsel of a large law firm with the responsive, individualized service of a boutique one. We put our clients front and center. Our business lawyers in DuPage County build close bonds with you and get to know your company’s operations so they know how best to assist you.

Types Of Financing Available For Illinois Businesses

Modern business owners have more options for raising capital than their predecessors did even 20 years ago. These can be grouped into two categories: debt financing and equity financing.

Simply put, debt financing means taking out a loan that your business agrees to repay, generally on a regular payment schedule with interest. Examples include a business loan from a bank, a Small Business Administration (SBA) Loan and a less formal borrowing arrangement from friends or relatives.

Equity financing works the opposite way. It involves selling ownership shares in your business to raise capital. Traditionally, this involved selling stock or ownership shares to new partners. These days, venture capitalists or online crowdfunding campaigns on platforms like GoFundMe are increasingly common.

Legal Implications Of Different Business Financing Options

Deciding how to raise capital for your business can be a challenge. Debt financing and equity financing each come with distinct legal implications. Debt financing typically an obligation to repay, collateral and compliance with loan agreements. Failure to follow through can lead to litigation from the creditor. Equity financing, on the other hand, involves selling a portion of your business, which may trigger securities law regulations. These laws aim to protect investors and ensure transparency. A conflict can result in legal action from both the investors and federal agencies like the Securities and Exchange Commission.

Navigating these regulations and risks can be challenging, making it crucial to seek advice from an experienced attorney. Legal counsel can help protect you by explaining the risks and benefits of each option available to you. Once you decide, your lawyer can provide ongoing assistance to help ensure your business complies with all applicable laws.

How Your Business Structure Affects Financing

Your company’s type of structure plays a substantial role in your financing options. Investors will consider your company’s tax penalties and liability if litigation or a loan default should occur. In a sole proprietorship, there is very little separation between personal and business assets. The owner is liable, and their personal assets are at stake.

Corporations and LLCs, or limited liability companies, offer much better protection. When it comes to financing, the difference between a C corporation and an S corporation is that C corps do not have restrictions around the number of shareholders, while S corps are limited to 100. If you are considering an S corp versus an LLC, the LLC entity offers a greater likelihood of obtaining a bank loan. Investors find LLCs attractive because they usually have more liquid assets plus an established history.

Talk To Us About Financing Your Company

Our business financing lawyers at Huck Bouma are eager to help you thrive. Contact our law office in Wheaton to schedule your initial consultation. Please call us at 630-221-1755 or send us an email.