Definition

Getting money by selling a piece of your company to investors. It brings cash into the business without adding a loan to repay.

What to consider

  • Compare interest rates and terms.
  • Ensure repayment schedules are manageable.
  • Consider the overall impact on cash flow.

Real world scenarios

  • A company borrows money from a bank to purchase new equipment.
  • An entrepreneur secures a line of credit to support day-to-day operations.
  • A small business takes out a loan to fund a major expansion project.

Related terms

Entrepreneurial Finances