What Is Equity Financing? Debt vs. Equity Financing

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Debt vs. Equity Financing: How to Choose the Right Option for Your Business
What Is Equity Financing?
Benefits of Equity Financing
It Opens the Door to the Capital You Need
It Gets You Access to Industry Experts
The Funds Don’t Have to Be Paid Back
Drawbacks to Equity Financing
You Lose Some Ownership (and Profit)
You’re Not the Only Decision Maker
It’s Slow
Examples of Equity Financing
Shares
Venture Capital
Angel Investment
Convertible Debt
What Is Debt Financing?
Benefits of Debt Financing
You Retain Full Ownership (and Profit)
There May Be Tax Advantages
It’s Fast
Drawbacks of Debt Financing
Payments Tie Up Your Capital
It May Be Challenging to Qualify
You May Put Your Assets at Risk
Examples of Debt Financing
Bank Loans
SBA Loans
Line of Credit
Merchant Cash Advance
Invoice Factoring
Debt vs. Equity Financing
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About the Author
Susan Guillory is the president of Egg Marketing, a content marketing firm based in San Diego. She’s written several business books, and has been published on sites including Forbes, AllBusiness, and Cision. She enjoys writing about business and personal credit, financial strategies, loans, and credit cards. Follow her on Twitter @eggmarketing.
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