Types of Finance
Finance is essentially divided into two types...
- Equity finance - the raising of capital through the sale of shares in a business. Equity can be sold to third-party investors with no existing stake in the business. Alternatively equity financing can be raised solely from existing shareholders, through a rights issue.
- Debt finance - an arrangement between borrower and lender. A capital sum is borrowed from the lender on the condition that the amount borrowed is paid back in full either at a later date, multiple dates, or over a period of time. Interest is accrued on the debt and paid independently of the capital repayment schedule. No ownership or control of the business is relinquished.
Use the drop down menu to select the stage most relevant to your business. Source: British Business Bank