Why would you accept debt financing over equity financing?

[Niyi]

As a company progresses, there is need for financing. There are two options. One option is debt financing and the other option is equity financing.

Which type of financing would you subscribe to for your business?

 

[Iboro]

When you see a person opts for debt financing, he so much believes in the potential of that business and doesn't want to share ownrship.

 

[Frank]

Debt financing is good for a company that have been in the business for a very long period of time have the necessary personnels that can help manage their finances. The team should look out for soft loans with low interest rates that will enable the operations of the company to be run smoothly.

 

[glitch]

Debt financing makes more sense for most businesses. I guess it really depends on the field and how large of a business you are running though. Different circumstances require different needs.

 

[Kane]

I cannot generally say whether I will choose equity financing or debt financing. What I choose depends on how much money I need and how much cost I will have to bear. If I am supposed to give a large portion of my shares for equity financing for a comparatively lower investment, I would never accept equity financing. If my interest rate is higher, I might also avoid debt financing.

 

[Good-Person]

Debt financing is good for a company that have been in the business for a very long period of time have the necessary personnels that can help manage their finances. The team should look out for soft loans with low interest rates that will enable the operations of the company to be run smoothly.

Well, the main problem with debt financing is that if you borrow huge amount of money, then you may be responsible for paying the loans back. Moreover, there are many other problems as well. You may need to pay a very huge amount of interest as well.