Are you having challenges raising long term financing for your business? Are you intent on expanding your business but do not know how or perhaps do not have the requisite capital to pursue such a noble enterprise? Well, if you grappling with any of these questions or any issue related to obtaining long term business capital, you do not need to fret. There are a variety of options within the capital market in Ghana. One of the time-tested and credible routes is listing with the Ghana Alternative Market (GAX).
What precisely is GAX? It is basically an innovative market operated by the Ghana Stock Exchange with a focus on SMEs with high potential for growth. GAX welcomes business entities at various stages of their development, including start-ups and existing companies, both small and medium. www.ghanatalksbusiness.com has put together eight reasons why your company should consider listing with GAX.
- Access to Long – term Capital is at a relatively lower cost
Securing long term capital through GAX will be at a relatively lower cost to your business establishment. Advisory and Regulatory fees involved will be lower than that of the main list on GSE. Securities and Exchange Commission guidelines insist on total cost not exceeding 5% of the total amount to be raised. An Added bonus is that listing fees on GAX is a fixed flat amount.
- Access to Long-term Capital is much easier with GAX
Listing on GAX will afford your company the opportunity to secure longer term capital. The raising of such capital will strategically position your business for future expansion, growth and greater capacity to stand competition.
- Improvement in the financial position of listed companies
All companies listed on GAX expressive a significant improvement in their overall financial position. That will be the lot of your company should it be listed on GAX and this benefit is immediate. The injection of considerable equity funds, for instance, improves the company`s balance sheet immensely. With such capital re-enforcement coupled with market discipline imposed business profitability and efficiency are expected.
- Risk reduction and liquidity improvement
Doing business is generally associated with risks and these risks can spell doom for any given business entity. Thus an opportunity to reduce risk without it affecting business growth and profitability sounds very much like a good deal. The Ghana Alternative Market enables listed companies widen their investor base and provide liquidity for their shareholders/investors.
- Enhanced status in the community
Listing on GAX will create the much needed visibility of your company to the larger investing community; it will raise the level of the investing community`s awareness of your enterprise, its products and services. This will place your business entity in a better and much more favourable stead to attract high-caliber employees and increase general business opportunities.
- Realization of value of investments
Do you own a company? Well this is specifically for you: You can benefit from the realization of value of your investments when listed on GAX. The market will determine the value of the company and hence original owners can realize the value of their equity in their company.
- Access to GAX-SME Listing Support Fund
Your business establishment may enjoy access to a revolving fund to cushion the cost of raising capital and postponement of up-front fees. Companies listing on GAX can submit applications for funds under the GAX-SME listing support fund to either make full payment or part payment for the cost of advisory services
- Underwriting minimum offer
If listed with GAX, your firm may enjoy by way of incentives an obligatory underwriting of the minimum offer directly or indirectly by sponsor. So there will be no failures of Initial Public Offers. This should be comforting to say the least.
Now that you know the benefits that may accrue to your company if listed on GAX, you can make an informed decision on the way forward for your company. Watch this space in the coming days and possibly weeks for more insights about GAX.