Debts and Equity Financing

Companies mainly have two forms of funding options for raising capital for business needs: equity financing and debt financing. Most businesses use a mix of debts and equity financing, but each has its own set of benefits. Companies usually have the option of seeking debt or equity funding. The decision is also based on which source of financing is the most convenient for the company, its cash flow, and how important it is to the company’s principal owners to retain control.