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Showing posts with the label Capital Debt Financing

Common Stock Financing or Capital Debt Financing – How can you Raise It?

There are two methods to finance the requirements of a business. They are debt financing or equity financing. While discussing about debt financing, it is using debt or borrowing money finance to pay off the outstanding bills or finance the purchases. Capital debt financing refers to borrowing money, also called " capital ", for the purchase or financing of real property or capital improvements. The simple way to raise debt for a business is to take out a commercial loan from a bank. The banks will ask for collateral when you take out the loan with the business owner’s property such as home or investment account. You will have to pay off the loan amount within a definite period of time with a fixed rate of interest. Once you repay the loan, you may take out the same amount of loan again for your business with the same terms and conditions without the need of more paper work. Equity financing comes directly from the company or its owners. The profits that are re-inv