Question

A company with a poor credit rating needs to raise funds for expansion, but the bank will not give them a loan. In addition, their common stock prices are already low, so they do not want to issue more shares of common stock. What would be the best way for this company to raise funds for the expansion

Answer 1

Answer: The best way to raise funds would be to sell secured bonds.

Step-by-step explanation:

A secured bond will help companies raise the money relatively fast. The bond will be backed by the collateral pledge on the bond. The borrowers of these types of bonds will offer secured bonds as a way to secure the loan.

If the borrower defaults, the collateral is given to the lenders right away. So, they will get the business or whatever it was that was backed by the secured bond.