2 min read
Definition
Debt finance is money borrowed and repaid over time with interest — a loan, line or other facility. The cost is finite and you keep 100% of the company. Equity finance is money raised by selling a share of the business to investors; there is no repayment, but you give up a permanent slice of ownership, profits and control.
For a profitable business that can service borrowing, debt is usually the cheaper capital long-term; equity suits pre-profit or capital-hungry ventures. See business loan vs equity and debt vs equity for scaling.
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