Debt Financing
The borrower is obligated to repay the amount within a stipulated time and specified interest in this type of financing. Debt financing is commonly known as loans.
For example, you take 1,00,000 rupees debt from the public. Now, you must repay the loan you have taken from the public. Moreover, specific interest rates would also be levied on the overall debt financing.
Debt vs Equity Financing: Difference? – Which Option is Best for You?
When a company wants to expand its work or reach, it requires funds or working capital, and accumulating such a tremendous amount of funds alone is not an easy task. So a company explores two ways of getting funds; debts or equity. Although debt and equity are two different ways to onboard funds for the company, both have their significance.
Table of Content
- What are Financing and its Types?
- 1. Debt Financing
- 2. Equity Financing
- Merits of Equity and Debt Financing
- Demerits of Equity and Debt Financing
- Debt vs. Equity: Which One is Better for Entrepreneurs?
This article will discuss the two options that every entrepreneur has to face in their journey. In addition, we’ll also discuss the differences and objectives. Finally, we’ll conclude the article with a rational decision about the best option for entrepreneurs. So, let’s start with today’s article.
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