Regulation A offering is an exemption which gives small businesses the ability to go public.
Regulation A Offering is an SEC ruling that allow for simplified registration for companies with offerings of $1,500,000 or less. It gives many small businesses the ability to go public with their business and earn capital through the selling of securities.
To qualify the SEC has set several requirements for businesses to qualify for the exemptions. Regulation A Offering exemptions are good for businesses that are legally registered with the government to do business in the United States or Canada. Companies eligible for the exemption must also not be a developmental stage company. They should have a specific business plan with no plans to merge with unidentified businesses. An investment company is also ineligible for Regulation A Offering exemptions.
Being able to sell securities is a great source of funding for any business. It is extremely important however to have additional sources for capital available as well. This could include small business bank loans, bank lines of credit, business credit cards, private investment capital, account receivables factoring, and many other options.
To help you better qualify for financing it is important to have your business in order including having a detailed business plan with information on how much capital you need and what the capital would be used for. Your chances of receiving financing will increase exponentially if you have established business credit scores already in place. These scores work similar to personal credit scores, but they are for your business. Lenders want to see positive credit history before they loan any money to your business. They wan to make sure that they will get paid back for their loan.
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