Debt Payment Benefits There are a few benefits to lending your business

The lending agency cannot control how you run your company, and it has no ownership.
Once you have repaid the loan, your relationship with the lender ends. That is very important as your business is very important.
The interest you pay on financing tax debt . Debt Financing Disadvantages However, financing your business debt comes with some reductions: is deducted as business expenses.
Monthly payments, as well as division of payments, known costs that can be accurately incorporated into your forecast models.

Adding credit to your monthly expenses assumes that you will always have an income to cover all business expenses, including debt repayment. For small or medium-sized companies that is often far from certain.
Lending to small businesses can be significantly reduced during the recession. In difficult economic times, it can be difficult to get a mortgage loan unless you have a lot of training.
During the economic downturn, it can be very difficult for small businesses to qualify for credit.
The US Small Business Administration (SBA) works with some banks to provide small business loans. Part of the loan is guaranteed by the full credit and trust of the United States government. Designed to reduce the risk to lending facilities, these loans allow business owners who may not be eligible for credit.1 You can find more information about these SBA loans and others on the SBA websiteb  How to get business loan 

What is Equity Financing?
If you have ever watched ABC's hilarious series “Shark Tank,” you may have a general idea of ​​how funding works. It comes from investors, often referred to as “venture capitalists” or “angelic investors.”

The firms of large corporations often deal with significant investment ($ 3 million or) Venture capitalist is usually a firm and not a single person. more), so the process is slow, and the deal is often complicated.

Angel investors, by contrast, are usually wealthy people who want to invest a small amount in one product instead of building a business. They are perfect for software developers who need additional funding to support their product development. Angel investors are moving fast and looking for simple words.

Equity financing uses an investor, not a lender. If you end up in debt, you owe nothing to the investor, who, as part of the business owner, automatically loses his investment.
Benefits of Equity Financing
Supporting your business with investors has a few benefits: benefits:

The big advantage is that you do not have to pay any money. When your business falls into the collection, your investor or investors are not creditors. They are the owners of your company and, as a result, their money is lost along with your company.
You do not have to make monthly payments, so there are usually extra cash on hand for operating expenses.
Investors understand that it takes time to build a business. You will get the money you need without the pressure to see your product or company thrive in a short period of time.
Injustice of Equity Financing
Similarly, many injustices come with equity funding:

How do you feel about having a new partner? When you increase your equity funding, it involves giving up part of your company. If the investment is too important and too risky, the investor will want a bigger share. You may have to lose 50% or more of your company. Unless you later make an agreement to buy an investor stake, that partner will take 50% of your profit permanently.
You will also need to consult with your investors before making any decisions. Your company is no longer your own, and if an investor has more than 50% of your company, you have an employer to turn to.
What is Mezzanine Capital?
Put yourself in the borrower's situation for a while. The lender seeks the best value of his money compared to the minimum amount of risk. The problem with debt financing is that the lender does not participate in the success of the business. They only get their money back and interest when they are in danger of not paying. That interest rate will not provide a surprising return on investment rates. It will probably provide a one-digit return.

Mezzanine capital often combines excellent features of equity and debt financing. Although there is no set framework for this type of business finance, a loan usually gives the lender the right to convert the loan into interest on the company if you do not repay the loan on time or in full.