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Capital Structure Optimization

HighBank believes that the success of a business depends, in large part, on the effectiveness of its capital structure. Unfortunately, over the past decade there has been an outsized abundance of investment bankers selling pre-packaged products aimed at solving problems that never existed. Since we don't underwrite securities or sell proprietary products, our advice is pure and unbiased.

An effective capital structure consists of three main ingredients:

  • Consistency
  • Flexibility
  • Cost

Capital structure consistency requires that the mix of debt and equity financing match a company's anticipated 3-5 year growth and longer-term strategic plan. Capital structure flexibility requires that changes be implemented quickly and at a modest cost because, despite the best planning, markets and economies (as well as corporate objectives) change and such changes should not paralyze a company from acting decisively. Finally, the cost of capital should not necessarily be the lowest cost, but rather the lowest cost for the structure that meets the growth and risk appetite of a company's board and executive management team.

Our approach allows our clients to optimize these three ingredients in their capital structures.