What is the difference between debt financing and equity financing?

  1. saif113sb profile image81
    saif113sbposted 5 years ago

    What is the difference between debt financing and equity financing?

  2. Michael Tully profile image60
    Michael Tullyposted 5 years ago

    Debt financing is the borrowing of money from lenders, who expect the money to be paid back at some future date with interest. Equity financing is the receipt of money from the owners of the business, who do not expect it to be repaid unless and until the business is liquidated, but who do expect a return on their investment in the form of a share of the profits. Corporate bonds are an example of debt financing; common stock is an example of equity financing.

 
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