Discuss with examples under what situations would you consider DEBT FINANCING when operating a small business.
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Answer :::
One of the two main ways that a business can finance its operations, debt financing is the process in which a business borrows money to fund working capital, the purchase of specific assets, or other operations. This money is to be paid back at a future date, with interest.
Debt financing includes bank loans; loans from family and friends; government-backed loans, such as SBA loans; lines of credit; credit cards; mortgages; and equipment loans.
If equity financing is used to raise money from investors for business obligations, the investors may want a seat on the board of directors or may require that a percentage of ownership becomes theirs. If a business owner does not want to give up a portion of the control of the firm, then debt financing is preferable
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