Debt or Equity – Find Out the Right Debt to Equity Ratio for Your Business

 


Original Content: Business Upside

What is the difference between debt and equity financing? 

Understanding the concept better is essential to understand what each one means. 

Every business must have some extra or surplus cash to run without hassles. So, you have two options, debt financing, and equity financing. What are Debt and Equity Financing? 

Debt financing

In this type of financing, you borrow to arrange finances. The loan can be either secured or unsecured, and you must pay back the loan within the loan term. These include the following.

  • Term loans
  • SBA loans
  • Line of Credit
  • Merchant cash advance
  • Invoice financing
  • Equipment financing

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