Lighter Capital

JULY 20, 2023

Some founders may choose to spend months pursuing equity funding from angel investors and venture capitalists, while others leverage debt financing to grow quickly without giving up equity or control too soon. Why do startups use debt financing? It’s best to start with the basics.

Debt Financing 52

Debt Financing Finance Equity Equity Financing 52

Sun Acquisitions

FEBRUARY 14, 2024

Consider options such as raising capital through equity financing or securing a bank loan to fund your expansion plans. While it provides capital without the burden of debt repayment, it dilutes ownership and may involve relinquishing some control. Debt Financing: Debt financing involves borrowing money to fund your acquisition.

Debt Financing 59

Debt Financing Equity Financing Finance Equity 59

Sun Acquisitions

FEBRUARY 28, 2024

If you have substantial cash reserves, you may opt for an all-cash deal, reducing debt burden and interest costs. Debt Financing Debt financing involves borrowing money to fund the acquisition. It can be attractive if interest rates are low, and your cash flow can support the debt service.

Finance 59

Finance Debt Financing Equity Financing Equity 59

Andrew Stolz

AUGUST 6, 2020

The optimal capital structure of a firm is the right combination of equity and debt financing. Debt financing may have the lowest cost, but having too much of it would increase risks to the shareholders. Because it is tax-deductible, debt financing tends to have a lower cost than equity financing.

Capital Structure 52

Capital Structure Debt Financing Equity Financing Finance 52

Benchmark Report

JULY 1, 2022

First, the financing needs to be raised with consideration of the company's operating cash flows. For example, if the business uses debt financing, it should have sufficient funds to cover the interest and repay the debt.

Debt Financing 52

Debt Financing Finance Equity Financing Banking 52

Equilest

JANUARY 8, 2023

Firm A has a higher proportion of debt financing, while Firm B has a higher proportion of equity financing. The reason that the value does not change stems from the fact the weighted average cost of capital is not affected by the debt. . . Debt financing: 60% * 100 million USD = $60 million.

Weighted Average Cost of Capital 40

Weighted Average Cost of Capital Business Valuation Capital Structure Debt Financing 40

Andrew Stolz

AUGUST 6, 2020

Where V (unlevered) = company with no debt financing and V (levered) = company with some debt financing). Investors that purchase shares of a leveraged firm, one with a mix of debt and equity financing, would receive the same profits as when buying shares of an unleveraged firm, which is financed entirely by equity.

Debt Financing 52

Debt Financing Capital Structure Equity Finance 52