ENTREPRENEURSHIP

Detailed explanation-1: -With equity financing, there is no loan to repay. The business doesn’t have to make a monthly loan payment which can be particularly important if the business doesn’t initially generate a profit. This in turn, gives you the freedom to channel more money into your growing business.

Detailed explanation-2: -With equity financing the pros and cons are reversed. No Interest Payments-You do not need to pay your investors interest, although you will owe them some portion of your profits down the road.

Detailed explanation-3: -Because equity financing is a greater risk to the investor than debt financing is to the lender, debt financing is often less costly than equity financing. The main disadvantage of debt financing is that interest must be paid to lenders, which means that the amount paid will exceed the amount borrowed.