Equity or Debt - which one is right for your business?
What is the difference between equity and debt?
Equity vs debt is one of the first questions some business owners ask. The difference is quite important, as some forms of finance affect several aspects of how you run and manage your business.
Raising equity finance means selling a stake in your business. Often an investor will provide more than just capital. For example, they may take an active role in one or more aspects of how the business is run.
For early stage businesses, yet to deliver a profit, debt finance may not be an option. This is often where equity options can play an important role in supporting plans for growth.
The video above outlines some of the things you should take into account when deciding which financing option is most appropriate for you and your business
We recommend you use the “Your Journey” option in this site. This will allow you to explore some of the financing options available to a business facing the type of challenges and opportunities most relevant for your next stage of growth.
It has been designed to help you to make a decision about each of the equity vs debt options available to you.
Access to the right kind of finance at every stage in your growth journey enables businesses like yours to invest, grow and create jobs. That’s why the British Business Bank and ICAEW’s Corporate Finance Faculty, and partner organisations representing finance and business, have created the business finance guide.
The Business Finance Guide
Download our comprehensive guide in PDF format allowing you to print and read at your leisure.
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