When a company needs to raise capital, there are two types of funding available: Equity Finance and Debt Finance. Debt financing refers to borrowing money, while equity financing involves selling a portion of the company’s shares. The biggest merit of equity financing is that you do not have to repay the funds raised. The main advantage of debt financing is that, unlike equity financing, the entrepreneur does not relinquish control of the company.

Companies can determine the appropriate financing option by carefully analyzing their business goals and needs and learning enough about both financing options. Additionally, our team of experts will help you understand and select the financing options that are right for your business and help you finance your business depending on the option you choose.

Equity Financing

Equity financing, or funding, comes from a variety of sources. For example, the entrepreneur’s friends and family, professional investors, and initial public offerings (IPOs) can all provide the necessary funding. A public issue of shares allows a company to raise capital from public investors. The term equity financing refers to financing public companies, but the term also applies to financing private companies.

Debt Financing

Debt financing is when a company raises money by selling debt securities to investors. Debt financing is the opposite of equity financing, which raises funds by issuing shares. Leverage occurs when a company sells fixed-income products such as bonds, bills, and bonds.