Debt versus equity finance

Debt versus equity finance

Most forms of funding fall into one of two camps. You can get a loan, or sell a share of your business to investors. Let’s look at the main pros and cons of debt versus equity and understand how they can help or hinder your business.

The difference between debt and equity funding

Debt is a loan that you have to pay back. Equity finance is what you get when you sell a stake in your business to someone else. They are very different things.

This doesn’t have to be an either/or choice. A combination of both debt and equity funding might be best for your business at times. But it pays to know what you’re getting into with each.