Small Business Financing: (Which Option Is Really Best For You?) Equity, Debt, or Convertible Debt?8/16/2018 When considering small business financing, it’s important to understand all your available options. Otherwise, investors can easily take advantage of you and offer unfair terms. So before raising any money, learn if equity, debt or convertible debt financing makes the most sense for you to grow your business.
Equity Raising capital through equity is a popular, if not the most popular choice, for entrepreneurs to pursue. Investors buy stock in your company, giving them a financial stake in the future success of your business. How It Works
Debt-based fundraising is the form of small business financing most small businesses end up choosing, says Fundable. It’s also the easiest to understand. Money is loaned to you with the agreement you’ll repay it over time with an established interest rate. How It Works
A convertible debt small business financing structure is a mix of debt and equity financing. The money raised is considered a loan, but at some future date the loan can convert to equity if the lenders so choose. How It Works
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