Direct Placement

Direct placement is an equity offering without an underwriter which is usually exempt from SEC filing. This is when a company decides to raise funds by selling ownership in the company rather than debt financing with debentures and other things. Typically companies chose to issue their securities to the public using an underwriter like an investment bank. A direct placement takes out the middle man and allows a company to offer its securities directly to the public. This type of placement also eliminates the timely process of filing the securities with the Securities Exchange Commission.

The first place many businesses turn to is banks. Banks are a great source of capital, but they only lend to businesses with excellent credit and track records. 


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