Debt versus Equity

There are two basic types of financing: debt, which is a promise to repay a loan (secured or unsecured), and equity, in which you sell a portion of ownership for the needed capital or resources. However, most business owners desire to remain in total control of their businesses. That is the reason why they choose debt financing. But sometimes not easy to repay the loan amount.

The safer way is to choose equity financing. It will cost you a portion of ownership, but you may also gain valuable experience from an investor with a working knowledge of your industry. Sometimes the only way to win is to lose—a little.

SBIC’s work by providing funds in return for ownership, often in conjunction with additional money in the form of a loan.