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Debt versus Equity

There are two main sources of capital – Debt and Equity. Debt is capital you have to pay back, and Equity is capital you receive in exchange for stock in your company.

Debt tends to be more accessible than Equity since there are far more lenders in the world than Equity Investors and they tend to finance more types of businesses.

Equity is attractive because it isn’t based on your personal credit or collateral and does not have to be immediately paid back in the form of installment payments. It’s a lot harder to come by though.

Buying & Selling a Business