To expand, it’s necessary for business owners to tap financial resources. Business owners can utilize a variety of financing resources, initially broken into two categories; debt and equity.
“Debt” involves borrowing money to be repaid, plus interest, while “equity” involves raising money by selling interests in the company. Essentially you will have to decide whether you want to pay back a loan or give shareholders stock in your company. Adding venture debt to the equation can be more cost efficient than giving away equity in the long run. This calculator allows you to compare the cost of pure equity to equity plus debt.