Share capital has a positive impact on a company’s balance sheet, as it is classified as an asset. This is in marked contrast to a loan, which is treated as a liability. Consequently, a company that is financed by borrowings, for example from its parent charity (if a trading company) or from supporters, will find it very difficult to borrow money from a bank since the bank will regard it as already highly ‘geared’. On the other hand, if it has a reasonable amount of paid up share capital this should give it a stronger balance sheet, providing an asset based upon which a bank can take security.