A Debenture refers to a financial instrument in raising funding that is used by cricket clubs. This is defined as a loan agreement certificate that is issued under the cricket’s club stamp and carries an undertaking that the debenture holder or the one loaning the money will receive a fixed return, such as a guaranteed free match ticket or lower ticket price. A number of cricket clubs have fostered a debenture to allow their fans to gain a financial stake in the club. This strategy is believed to foster a sense of community.
Advantages of Debenture
With the reluctance of banks offering business loans, a number of corporate directors resulted in lending money to cricket clubs. In debenture, the details of the total loan amount, interest rate, charges (if any), and repayments are well-defined. This is to ensure that the investors’ money is secured and the cricket clubs get to safeguard their assets. Here are some lists of the advantages of debenture:- Investors are ensured that when it
in a higher position, giving them a
greater chance to recover their
money.
- If the investor is a cricket fan,
are the highlight of debenture
investment.
- Using debentures can encourage
grow while at the same time raise
funds for the cricket club.
- The control of the company is not
cricket club, and profit-sharing
continues in the same proportion.
Disadvantages of Debenture
In financial investments, such as debenture, there are advantages and disadvantages.But, cricket clubs should not look into the disadvantage as a hindrance to their goal of raising more funds, especially if it benefits everyone.Nevertheless, those that are interested in trying debenture, the investor needs to be aware of the risks that he is going to take, especially if the cricket club experiences a financial difficulty that can compromise the growth of the business.If this happens, as an investor, getting the returns might not be as what was agreed upon. In some cases force, insolvency can occur.To avoid such circumstances, the investor should research more about the cricket club that is offering debenture. Read about their current financial status and whether they have the ability to return the investment made.It is also essential to look at the overall management state of the cricket club and to see if it is performing well.Good management can often result in good return investment.