BELZONI, MS, October 17, 2023 – Guaranty Capital Corporation (“Guaranty”), the holding company of Guaranty Bank & Trust Company (“Guaranty Bank”), and Lafayette Bancorp, Inc. (“Lafayette”), the holding company of Oxford University Bank (“Oxford University Bank”), announced today the signing of a definitive merger agreement pursuant to which Guaranty will acquire Lafayette. The transaction has been approved by the board of directors of each company, is expected to close in the first quarter of 2024, and is subject to customary regulatory and shareholder approvals.  Upon completion, Oxford University Bank will become a wholly owned subsidiary of Guaranty.  Guaranty expects to merge Oxford University Bank with and into Guaranty Bank, with Guaranty Bank surviving, in the second or third quarter of 2024, subject to regulatory approval.

Founded in 2000, Oxford University Bank has established itself as a reputable full-service bank, with three well-positioned locations, two in Oxford and one in Pontotoc, and ranks 4^th in Oxford deposit market share. As of June 30, 2023, Lafayette had total assets exceeding $245 million. This strategic acquisition marks a significant milestone for Guaranty’s growth strategy and reaffirms our commitment to providing exceptional financial services to our valued customers in the Oxford market. Post-acquisition, the combined companies will have approximately $2.6 billion in assets with 39 branches across Mississippi and Tennessee. 

Hue Townsend, President and CEO of Guaranty Bank, commented, “We are pleased to partner with Oxford University Bank, a well-respected bank serving the Oxford and Pontotoc communities. Our shared values, centered on delivering a community bank experience, allows us to leverage our collective strengths and resources to provide even greater support and opportunities.”

“We are excited about this new journey with Guaranty Bank,” said David Guyton, CEO of Oxford University Bank. “Oxford University Bank is a community-focused financial institution with a Certified Development Financial Institution (CDFI) designation, just like Guaranty Bank. This strategic partnership reinforces our dedication to serving that community. Together, we will continue prioritizing the well-being and success of our customers and the community we call home.”

Guaranty was advised by Keefe, Bruyette & Woods as financial advisor and Hunton Andrews Kurth LLP as legal counsel.  Lafayette was advised by Olsen Palmer LLC as financial advisor and Butler Snow LLP as legal counsel.

About Guaranty Bank & Trust Company

Founded in 1943, Guaranty Bank has remained independent and locally owned, delivering extraordinary service and products to clients in Mississippi and Tennessee. We commit to our vision daily, offering a cutting-edge community bank experience through dedicated high performance, people development, and open communication. When we execute these pillars of our vision, we deliver an experience like no other bank. Over the last few years, Guaranty Bank has shown exceptional growth by managing risk while increasing capital above market rates. Our consistent 5-Star rating by BauerFinancial for 24 consecutive quarters attests to our substantial capital, adequate liquidity, superior asset quality, and strong earnings. For more information about Guaranty Bank, visit www.gbtonline.com. 

About Oxford University Bank Established in 2000 in Oxford, Mississippi, Oxford University Bank continues to operate from its headquarters in the same location. The bank was founded with the objective of making a difference by delivering exceptional service, providing a full suite of modern financial services, and offering a personal touch to all members of its communities. For additional information about Oxford University Bank, please visit www.oubol.com.

In today’s rapidly evolving financial landscape, businesses face numerous challenges, with cybercrime being a significant concern. Among the various forms of financial fraud, check fraud continues to be a prevalent threat. As we recently addressed in an urgent email to our bank business customers, it is crucial to stay vigilant and take proactive measures to safeguard your business against these malicious activities. In this blog post, we will delve deeper into check fraud, discuss how to spot potential red flags, and outline the necessary steps to take if you suspect fraudulent activity.

Understanding Check Fraud:

Check fraud is an umbrella term that encompasses a range of deceptive practices involving checks to unlawfully obtain funds from businesses. Fraudsters utilize various tactics, such as forging signatures, altering check amounts, or creating counterfeit checks resembling legitimate ones. These criminals often prey on businesses, where larger transactions and higher check volumes can make detection more challenging.

Spotting Check Fraud:

1. Missing Check Numbers: Regularly review your issued checks and ensure no check numbers are missing. Fraudsters may target unused check numbers to create counterfeit checks.
2. Altered Check Information: Check for any signs of tampering, such as changes to the payee’s name, check amount, or date. Be cautious of faded or irregular ink, erasures, or visible corrections.
3. Suspicious Endorsements: Investigate any checks with suspicious endorsements or signatures that appear inconsistent with the payee’s usual signature.
4. Unrecognized Transactions: Regularly monitor your account for unfamiliar transactions, particularly checks with unusually large amounts or those not initiated by your business.
5. Duplicate Checks: Keep track of your issued checks to identify any duplicates that may indicate unauthorized transactions.
6. Unusual Check Origins: Be cautious of checks received from unknown sources or unexpected individuals, especially if they claim to represent legitimate companies.

Responding to Check Fraud:

1. Act Promptly: If you suspect check fraud, take immediate action. Notify your bank and the involved parties, including the payee and any relevant authorities.
2. Record Details: Document all relevant information related to the fraudulent check, such as the check number, amount, date, and any accompanying documents.
3. Communicate with Your Bank: Inform your bank about the suspected fraud and provide them with the necessary details. Banks have a 24-hour timeframe to resolve check fraud cases.
4. File a Police Report: Report the fraud to your local law enforcement agency, providing them with the evidence and information you have gathered.
5. Secure Your Accounts: Temporarily close or restrict the affected account until the issue is resolved, and implement additional security measures, such as Positive Pay services.
6. Educate Your Team: Ensure that your staff is aware of check fraud risks and knows the proper procedures to follow in case of suspicion.

Protecting your business from check fraud requires vigilance, education, and proactive measures. By staying informed about the latest fraud trends and implementing security practices, you can significantly reduce the risk of falling victim to fraudulent activities. Remember that early detection and swift action are crucial in minimizing the impact of check fraud on your business. As your trusted bank, we are committed to assisting you in this endeavor, providing the necessary support to keep your finances safe and secure. If you have any concerns or questions regarding check fraud or account security, please do not hesitate to reach out to us. Together, we can strengthen the resilience of your business against financial threats.

Guaranty Bank & Trust Company to Acquire First American National Bank

BELZONI, MS – Guaranty Capital Corporation, the holding company for Guaranty Bank & Trust
Company (“Guaranty Bank”), announced today that it has entered into a definitive agreement to
acquire First American Bancshares, Inc. and its banking subsidiary, First American National
Bank.
Founded in 1964, First American National Bank is a full-service bank with 11 locations,
strategically located across Northeast Mississippi with more than $384 million in total assets.
This transaction aligns with Guaranty Bank’s North Mississippi and West Tennessee footprint.
The combined company will have approximately $2.4 billion in assets with 36 branches across
Mississippi and Tennessee.
Hue Townsend, President and CEO of Guaranty Bank, commented, “As we embark on this
exciting partnership with First American National Bank, we remain committed to our core values
of community, high performance, and financial empowerment. Together, we build a foundation
that fosters growth and cultivates relationships by combining our expertise and resources. We
will shape a brighter financial landscape with a shared purpose and create opportunities that
propel us all toward a prosperous future.”
“We are excited about joining the Guaranty Bank team as their banking culture maintains the
principles all our customers are accustomed to for more than half a century,” said Tommy
Chamblee, CEO of First American National Bank. “With this partnership, our customers will
gain access to a wider array of product offerings and expand our geographic locations. The
combined strength of the banks will enhance our proven ability to grow and support
entrepreneurialism in our communities, while strengthening the benefits to our customers and
employees.”
The transaction has been approved by the Board of Directors of both companies. It remains
subject to customary shareholder and regulatory approvals and is expected to close in the
fourth quarter of 2023.

The Bank Advisory Group, LLC, and the Hunton Andrews Kurth LLP law firm advised Guaranty
Bank in the transaction. Gerrish Smith Tuck, Attorneys and Consultants served as First
American National Bank’s financial and legal advisor.

About Guaranty Bank & Trust Company
Locally owned and operating since 1943, Guaranty Bank delivers extraordinary service and
products to Mississippi and Tennessee. We live through our vision daily by providing a cuttingedge community bank experience through high performance, people development, and
communication. When we execute these pillars of our vision, we deliver an experience like no
other bank. Over the last few years, Guaranty Bank has shown exceptional growth by managing
risk while increasing capital above market rates. We are proud to be recognized by
BauerFinancial as a 5-Star bank for 24 consecutive quarters. This superior rating reflects our
substantial capital, adequate liquidity, high-asset quality, and good earnings. For more
information about Guaranty Bank visit www.gbtonline.com.

About First American National Bank

First American National Bank was founded in 1964 by Dr. Kelly and Martha Segars in Iuka,
Mississippi, where the headquarters continue to operate. From its inception, they have been
committed to promoting community growth, and continue to live by that commitment for five
decades. They are known for their dedication to quality, strength, and integrity. First American
National Bank continues to focus on each community’s needs and its citizens’ financial services
by providing stability and security without losing the personal touch. For additional information
on First American National Bank, please visit www.fanb.bank.

Guaranty Bank HELPing make homeownership dreams happen!

We are proud to offer the Homebuyer Equity Leverage Partnership (HELP) program. This program offers down payment and closing cost assistant to low-income, qualified first-time homebuyers. Let’s work together to explore whether HELP is right for you.

Benefits and requirements:

• Only first-time homebuyers are eligible for the program. Some exceptions apply.
• HELP funds up to $15,000 per homebuyer.
• Household income limits apply (must not exceed 80% of the area media income).
• Homebuyers are required to complete a Homebuyer Counseling Program.
• Homebuyers must contribute $500 of their own funds toward the required down payment or closing costs.
• Homebuyers are required to sign a five-year retention agreement.
• Can be used in conjunction with Conventional, FHA, USDA, and VA loans.
• Additional qualifying guidelines apply.

*Program subject to change without notice. Subject to underwriting terms and conditions and some restrictions may apply.

To learn more about the HELP Grant, please contact Guaranty Bank’s mortgage department:

 mymortgage@gbtonline.com

RIDGELAND – Guaranty Bank & Trust Company CEO and President Hue Townsend announced that James “Nicky” Cobb has joined the bank. Nicky will bring his 34 years of banking experience to serve as the Greater Jackson Market President. He is dedicated to the Guaranty Bank culture of providing a traditional community bank experience and building personal banking relationships.

Cobb earned his Bachelor of Science degree from Mississippi State University and his Master of Business Administration from Texas A&M University. He attended Louisiana State University’s Graduate School of Banking in 2007 and the Southeastern School of Commercial Lending at Vanderbilt University.

Since his formal education, Nicky has been dedicated to serving his community as a board member of several area organizations, most recently the Madison County Business League and Foundation.

Nicky, his wife, Elizabeth, and their family have lived in Madison, Mississippi, for 22 years, and are members of Highland Colony Baptist Church.

“It is important we are represented by experienced professionals who are well-acquainted in our markets and dedicated to the communities they serve,” Townsend said. “We are proud to welcome Nicky to the Guaranty Bank team, supporting the work he does both professionally and personally for our community.”

Guaranty Bank is located at 601 Crescent Boulevard, Suite 300, in Ridgeland.

In partnership with the Mississippi Home Corporation (MHC), Guaranty Bank is proud to serve the home-buying needs of educators in underserved areas of the state. Making homeownership more accessible is part of Guaranty Bank’s commitment to community development. From MHC:

“In rural Mississippi, there exists a critical shortage of qualified teachers. In order to move Mississippi forward, our children must have the benefits of quality education. In response to this need, the Mississippi Legislature passed the “Mississippi Critical Teacher Shortage Act of 1998”, which offers attractive incentives for qualified teachers. The Housing Assistance for Teachers Program (HAT) was designed to assist with funding to help teachers buy homes. Making homeownership easier will certainly encourage teachers to move to these shortage areas.”

The Housing Assistance for Teacher Program (HAT) offers up to $6,000 in grant money to licensed teachers who meet the following criteria:

• Applicants must agree to render service as a teacher in an eligible district for three years, starting with the beginning of the school year
• Applicants meeting the credit eligibility requirements of FHA, VA, RD Guaranteed, Fannie Mae, or Freddie Mac

This grant is forgiven if the applicant remains employed for three years in one of the 71 school districts in Mississippi where a critical shortage of teachers exists. You can find a full list of eligible districts here. The grant can be used to cover down payment, closing costs, prepaid expenses, and mortgage insurance (if required). The teacher must provide at least 1% of the sales price of the home from their own funds. There are no income limits for this program, unlike many other down payment assistance programs. The home being purchased must be located within the county where the teacher is employed. Additionally, this grant must be used in conjunction with a 25- or 30-year fixed loan, FHA, VA, USDA, Fannie Mae, or Freddie Mac product. The funds available are dispersed on a first-come, first-served basis, and the grant program is funded on a yearly basis.

To find out more about this valuable community development program, how to apply, and if you qualify, please contact Guaranty Bank’s Mortgage department:

662-449-1089

mymortgage@gbtonline.com

NMLS# 405570

Homestead Exemption – What you need to know

A homestead exemption is when a state reduces the property taxes required to pay on your home. The exact rules and amounts vary by state but, you could save money on your annual tax bill if you qualify.

Who Can Apply

Each state’s qualifying events are different according to their regulations (see list below to find your state). If you live in Mississippi, the following events are eligible for homestead exemption.

If you:

• Purchased a new primary residence
• Turned 65
• Divorced
• Received a property through a will or court order
• Made a change to any names on a deed
• Made changes to the legal description of your property
• Made occupancy changes to your property
• Are a 100% disabled American veteran
• Experienced the death of a spouse that previously received the Homestead Exemption

Filing for Mississippi opens the first business day of January and closes the last business day of March each year for changes made the prior calendar year.

How to Apply

Each state is different and specific sites are listed below.  Mississippi residents can apply for the Homestead Exemption at their local tax assessor’s office.

Alabama – Homestead Exemptions – Alabama Department of Revenue

Arkansas – List of Officials – County Officials – AACD (arkansasassessment.com)

Florida – Florida Dept. of Revenue – Property Tax – Taxpayers – Exemptions (floridarevenue.com)

Georgia – Apply for a Homestead Exemption | Georgia.gov

Kentucky – Homestead Exemption – Department of Revenue (ky.gov)

Louisiana –Louisiana Homestead Exemption – Get the Actual Advantage (actualtitle.com)

Mississippi –Homestead Exemption Rules and Regulations | DOR (ms.gov)

Missouri – Property Tax Credit (mo.gov)

Texas – Residence Homestead Exemption Frequently Asked Questions (texas.gov)

If you have questions, please contact Guaranty Bank Mortgage at 662-449-1296.

Holidays. That time of the year when families reunite, lunches and mortarboards are carefully prepared, and gifts are exchanged. As the days go by and everybody returns to their busy lives, it’s time to sit at your desk and open the January bank statement. You immediately notice how many times the credit card has been swiped over the last few weeks, among all the toys, holiday nibbles, and last-minute gift purchases.

While this may not be the best post-holiday activity, it’s important to come to terms with your financial goals, find ways to get your money back on track, and avoid any further debt.

Read on to discover how to work out your financial situation after the holidays and to help keep your wallet full throughout the year.

Assess Your Current Finances

Once the wrapping paper has been thrown out it’s time to start assessing all expenses. have a look at your holiday one-time purchases, and by how much you went overboard during your shopping frenzy. Take a closer look at where you stood before the holiday season:

• What was your savings balance? By how much did it decrease, if so?
• By how much did your expenses increase during the holidays?
• What should your essential monthly spending look like?
• What immediate solutions should I take to cover all necessities?

Answering these questions will give you an initial idea of where your finances are standing and how to overcome any potential loss – retrieving your pre-holiday bank statements will come very helpful.

You may realize that cutting back on your spending for a while will be the best solution, at least until you regain control of your money outflows. Make sure you are prioritizing regular expenses such as a mortgage, rent, food, transportation, and utilities and that you are meeting your minimum card payment requirements or pay outstanding balances in full if you can.

After close examination, the faster you can eradicate your post-holiday debt, the sooner you’ll find yourself in better control of your finances.

Take Advantage of Returns and Unexpired Coupons

Few people are aware that holiday shopping can very well pay off. If you realized some of the items you bought are best to be returned or exchanged, you may still be on time to do so – don’t forget to bring the original receipt!

This is a good way to put some money back in your pocket and to get rid of gifts you don’t intend to keep. Watch out for the return window to avoid ending up with unwanted items that you cannot take back.

If you shop with a cash-back card, this is a good time to redeem any points or rewards you accumulated. You may end up with gift cards to use for your necessary spending.

Lastly, don’t forget to take advantage of coupon clipping – whether at grocery stores or retail shops. Saving money is very important at this stage, as it will help gain control of your expenses and refill your savings account.

Set Up a Fixed Allowance

Just because you are trying to save money after a big holiday shopping spree, it doesn’t mean you should entirely eliminate all spending. While this would be unrealistic, putting a cap on your purchases is completely within your power. Be mindful about the amount you do spend by setting up fixed amounts for each of your necessary expenses.

Much like traditional budgeting, this allowance will help you stay on track with essentials such as bills, rent, and food. To avoid further overspending, make sure you don’t go beyond these amounts, drawing only from the predetermined “allowance.” This will allow you to only use the money you can actually spend and see if you can indulge in small discretionary purchases on the next holiday season.

Limit Your Expenses

If you are in the process of paying off any extra debt you have accumulated during the holidays, it is wise to limit your expenses to a minimum. In other words, new credit card payments should be close to none. Instead, opt for carrying cash, at least until you’re back on your main financial plan. Paying through cash will help you “visually” see how much money is being spent, preventing you from making unnecessary purchases.

Try to restrict impulse post-holiday shopping, at least for a while. It’s easy to fall into the trap of some retailers, who will sell what’s left from the holiday period at much lower prices, making them more attractive to buyers.

In addition to the mental burden of managing debt, adding to your credit card balance will do you more harm than good. For instance, increasing your credit utilization rate or carrying an outstanding credit balance are all factors that will affect your credit score, so you want to try your best to minimize the damage.

Outline a Clear Plan

While this may sound obvious, creating a solid plan is crucial at this stage of money management. Make sure to outline your main goals, whether it be buying a home, a family holiday, retirement, and so on. This will help you focus on overcoming out-of-the-ordinary challenges like overspending on holiday shopping. Write down what you need to do to achieve those goals: saving more money? paying off outstanding debt? Ideally, you should try to stick with the 50/30/20 budget rule: use 50% of your monthly income to needs, 30% for discretionary purchases, and 20% for savings and debt repayment.

As you work on your plan, it would be wise to start preparing for next year’s holiday season as well. You may create a separate “holiday account” where you can deposit a few extra dollars each month. Once the holidays approach, start shopping in advance, taking advantage of seasonal sales (Black Friday and Cyber Monday) and free shipping offers to buy your gifts. Starting will also prevent last-minute purchases that may eventually add to the overall cost of holiday gifting.

Having a financially rough holiday season is normal and should not be a reason for panic. However, it’s important to get back on track as soon as possible to avoid the same situation the following year. Keeping an eye on credit card statements or holding off on post-holiday purchases is a great way to start re-focusing on your goals and future financial success.

The holiday season is a daunting time for trying to save your money. There are many exciting events during the season, and you don’t want to miss out on anything. You’ve also got plenty of obligations to consider, from your year-end taxes to getting gifts for family members.

You can keep your money under control during the holiday season by using a few points for your holiday saving needs. These include many tips to help you keep your funds in check during a time that is stressful.

Prepare a Budget

Start your holiday saving plans by looking at your budget for the season. Look at how much you’re going to spend on various expenses surrounding the season. These include budgeting expenses for:

• Gifts
• Foods for the season
• Travel for events
• Anything you will send out to people, including cards
• Decorations and other items for around the house

Look at what you’ll plan for the season and stick with the budget. Be realistic with the budget, as you don’t want anything that might be too lofty. You can also add a small bit of extra money to the budget for unplanned expenses, but try to keep those points to a minimum when possible.

Pay With Cash When Possible

It’s easy to go overboard with your credit card spending during the holiday season. But it is also tough to keep tabs on how much you’re spending with your card. You could spend more than necessary because you’re so interested in things during the season.

Paying for items with cash when you can is one of the best holiday saving ideas you can consider. Avoid using your credit card too often, as using it more than necessary could create a bill higher than you anticipate. You don’t want to spend money on interest payments, late fees, and other charges associated with struggling to handle your credit card bills.

Watch When You Buy Things

You could find great deals on different items you want to purchase throughout the season. It’s often easy to find discounts on products as you get a little closer to Christmas.

You might find some outstanding discounts on Black Friday or Cyber Monday right after the Thanksgiving season. Amazon users have also found the Amazon Prime Day promotion to be very exciting. But you should check on prices at varying times, especially as you get closer to Christmas. Sometimes you might find a better discount when a retailer is willing to sell something right away.

Review Your Credit

You should request an annual credit report every year to ensure your credit situation is under control. An annual report from each of the major credit reporting bureaus will help you identify if there are any concerns with your expenses or savings. You can also find potential errors and have these removed from your report if possible, helping you boost your score if you can correct something.

You may qualify for better rates on loans and other investments if you have a higher credit rating. You could also renegotiate a mortgage loan or another loan-term expense if you can provide details on a higher rating. This effort could help you save a little extra money during the holidays, as you won’t spend as much on long-term expenses here.

Review Your Current Savings

Check on your savings and checking accounts and other savings investments you have right now. Look at how well they are performing and if they are growing in value. You can review things like:

• How much interest you are getting out of your savings and checking accounts
• Whether your checking account is getting close to zero
• How the stocks or other investments you have are working
• Your 401k, IRA, or another retirement fund
• Any retirement benefits you are getting from your employer
• How much you reach from your employer, including if you saw a raise this past year

Your savings is essential to your life, as you’ll need enough to support your retirement years and any sudden expenses you might come across right now. Be sure when checking your funds that you know what you’re entering into and that you can tell you are saving enough money.

Manage Your Bills

You might have various bills to bear throughout the year. From utility bills to mortgage payments and even car loan payments, you might have many expenses of note.

You can use these points when getting your bills under control for the holiday season:

• See if you can make extra payments on your long-term expenses if possible. You may qualify for reduced monthly bills for some of these expenses, as the principal is smaller and the interest totals may drop.
• Plan how you can automatically pay off debts with a checking account to prevent late fees and other risks. Your bank may support a system that lets you pay these debts through your checking account, but be sure you have enough money in there first. Watch for how much you’d spend at this point.
• Review the due dates for all your bills. Plan a schedule for when you’re going to pay off these bills so you can keep tabs on your work and avoid risking possible extra expenses.

Plan Your Shopping Ahead of Time

You don’t want to get into lots of situations where you buy something at the last minute. You can plan your shopping efforts ahead of time to where you will buy things at the right moments. Last-minute or unexpected shopping efforts might lead you to spend more money than necessary. Sometimes you might spend on things that you don’t actually need, but you think you might want it anyway.

Look At What Works

You will be impressed with how well you can keep your money under control for the holiday season when you look at what works. Your budgeting plans should be managed well without risking possible threats. You’ll have an easier time enjoying your holidays when you know what you’re doing when spending your money.

The term “capital” is broad and can describe anything of value to its owner. Without capital, a business cannot function, whether it is a small family business, a major corporation, or a country’s economy. Think of capital as a way of measuring of wealth. Accountants look at capital in budgeting as cash flow.

Some examples of capital are:

Financial assets – money, stocks and bonds, and bank accounts.

Intellectual assets – patents, software, and brand names.

Physical assets – machinery, equipment, cars, printers, office chairs, computers.

Capital for individuals and capital for business?

Companies use structures that include capital as debt, equity, and daily operations and expenditures. In contrast, an individual holds capital to contribute to their net worth.

Money and capital

Capital is another way of saying “money.” Remember, capital comes with a cost. If the capital is debt, then interest is the cost. If the capital is equity, the cost is distributions the shareholders receive. In the financial world, capital is viewed through the lens of current operations and future investments.

Types of capital:

Working capital

Working capital is answered with this question: Can a company’s liquid assets cover daily obligations?

To calculate this, try two assessments.

-Subtract the current liabilities from the current assets

-Subtract the accounts payable from the accounts receivable and inventory.

Liquidity is another way to view capital. Working capital is a good barometer for a company’s short-term liquidity.

Debt

Borrowing is one way a business can gain capital, and the most common way of borrowing is through bank, bonds, or other financial institution. For small businesses, loans from friends, family, online lenders, or federal loan programs are often the source of debt capital.

There are many differences regarding capital for individuals and businesses. However, in both cases, a healthy, active credit history is required. As with any typical loan, the interest rates vary depending on the borrower’s credit history and health.

In everyday life, we think of debt as a burden. However, it can be an opportunity for a business, provided it is within reason. Monitor the debt to capital ratio to prevent going under.

Bonds are a great way to raise capital when interest rates are low, which means it is cheaper to borrow. Think of the bonds as an I.O.U. between a borrower and lender. A business may issue bonds to raise capital to fund its operations and projects. However, bonds are not limited to just businesses. States, sovereign governments, and municipalities may issue bonds to finance operations and projects. As a bond owner, you are the debt holder of the issuer.

Equity

There are several forms of equity capital. They are private equity, public equity, and real estate equity.

Comparing public equity and private equity

In public equity, the stock market raises equity by listing the company’s shares on the stock exchange. As investors buy stock, a company generates more equity. The single best way to raise equity capital is with I.P.O.s. (Initial public offerings) In private equity, a group of investors raise private equity, which is not the case with public equity.

Trading capital

Trading capital is what it says, and financial institutions and brokerage firms trade capital. There are several methods investors use to add to their trading capital, which are based on calculations determining the allocation of funds to each trade.

Cash reserves

One cannot have a successful investing strategy without optimal cash reserves. Debt liability offsets debt capital on the business’s balance sheet.

Capital can define a business’ structure

A company’s balance sheet is split among assets, liabilities, and equity, and the mix of these assets defines the structure. Some metrics for analyzing business capital are based on the cost of capital, equity return, capital debt, and equity debt.

Examples of capital

Capital comes down to any financial asset an individual or business has. Even one’s bank account is capital.

Tips for securing small business capital: Build a business plan

Lenders will want to see a well-thought-out business plan that outlines marketing, management, and money. As a borrower, one must explain how the money will be used. Like any loan, the single biggest criteria a lender will look for is the ability of the borrower to repay it. In short, a lender will want to know that you know what you are getting into. Having a well-thought-out business plan will help lenders feel more confident in the borrower, as it shows the borrower did their homework.

Business history

Borrowers should have at least two years of business history. Most lenders prefer this.

Plan for the worst

Provide the lender with a business projection 12 months out, broken out month-to-month. Show the lender case scenarios of what happens if the business drops.

Creditworthiness

Borrowers must check their credit for any errors, negative marks, or other issues that may affect their ability to borrow. Get credit in order, as one would when buying a house.

Capital F.A.Q.s

Capital assets is a term that applies to both individuals and businesses, which is anything of value, such as cars, real estate, and investments. Many capital assets are not liquid, which means they cannot be easily turned into cash.

Differences of capital in business and economics

An economist may define capital as liquid assets or cash in hand that can be used for spending. All the money in circulation is how capital is defined on a global scale. Business capital is the money available to run the business on a day-to-day basis and for the future. Typically, the revenue generated by the business is the only source of its capital.

In closing

Overall capital assets are determined by calculating any possession of cash value, such as cars, real estate, equipment, and machinery. There are different types of capital and the context of the use of the word capital can determine its meaning in each situation. View capital in the same way any other financial situation is viewed: Maintain a healthy debt to income ratio, maintain a healthy and active credit score, and monitor the cash flow and balance sheets.