Regulation A simplifies registration process for small businesses allowing them to go public.
Regulation A is a regulation put out by the U.S. Securities and Exchange Commission (SEC) which allows many small businesses the opportunity to go public with their business with a simplified registration process. Regulation A governs offerings of $1.5 million or less.
Registered businesses in the United States and Canada are eligible for the exemption. The business must also be established and in the growth stages to further qualify for the exemption. No companies in the developmental stage are eligible. The SEC provides a more detailed description of Regulation A on their website.
It is also vital that your business have additional sources for business financing in place in case funding through going public by way of Regulation A falls through. You can look into Small Business Administration (SBA) approved loans or bank lines of credit. Equipment leasing is another excellent source of financing. To help you improve your chances of being approved for working capital you should also learn about establishing business credit scores.
Business credit scores work just like personal credit scores, but are as important to your business as they are to your personal finances. A perfect example is that you can’t get approved for a mortgage loan for your house if you don’t have personal credit history. The same goes for your business. You can start establishing credit scores with a 1-3-5. That is 1 small bank loan, 3 business credit cards, and 5 vendor lines of credit. Our Business Finance Coach shows you step-by-step how to establish business credit scores, and also shows you which lenders to seek out that will help you establish credit for your business.