When entrepreneurs begin to think about either going into business for themselves or taking their business to the next level, the financial and money concerns become the main challenge to address and/or overcome.
Debt and equity are the two main financing options from which most businesses can choose. Debt financing in simple terms means borrowing funds for the business for a fixed period of time at an interest rate pre-determined at the time of borrowing. Equity financing, on the other hand, refers to the capital raised for a company by selling common stock to individual or institutional investors. It leads to sharing of ownership in the business, depending on the amount invested. The following is a brief introduction to the advantages and disadvantages of both debt financing and equity financing.
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