New Brunswick companies’ use of debt financing is well developed. However, you may not realize that as an entrepreneur or a company, you have other options when raising money:
Debt usually comes in the form of loans, mortgages, lines of credit and debentures, and is typically repaid in a series of installments over a set period of time. The person or institution that made the loan may also have some claim over your company or personal assets in the event that the loan is not repaid. Providers of debt include banks, credit unions or government economic development agencies.
Equity investment occurs when a company issues shares to an investor, and the new shareholders receive an ownership interest in the company. Equity investment is based on the valuation of the company at the purchase date and the amount invested determines the ownership interest in the company. Shareholders are entitled to receive dividends if they are declared by the board of director; however these types of investments typically do not require any other payments from the company to the shareholders. Investors typically hold their investment for an extended period of time and cannot sell their shares to other individuals within New Brunswick.
Below you will find information that describes the exemptions that allow companies to raise capital, tax programs available through the Department of Finance and information on a type of investor known as an Angel Investor. These options can be used by your business or community venture: