You were given an opportunity to own a business.Briefly describe your business then explain the most efficient way to raise capital to either start or expand your business.Determine two advantages of equity financing compared to debt financing option
Business: Food truck! You hit the lunch rush, are mobile, can move from spot to spot, and serve a variety of offerings.
This type of business requires financing to start, not to really expand. A loan (debt financing) is the most solid option in this case. After all, one can provide a specific business plan, a target demo, very realistic sales projections, and the risk is extremely low for the bank. They can, after all, use your equipment as collateral.
Equity financing would be advantageous in the sense that you do not "owe" money as a loan. Therefore, if you suffer a bad quarter, you don't have interest payments to fall behind on. Finally, equity financing allows you to raise a lot of money very quickly, and those types of investors are more high-risk without the high-risk interest that loans bear.
May 17th, 2015
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