Hear from Kirsten Olsen, Managing Director and Head of PWM Private Capital, as she explores the critical trade-offs between taking on debt versus raising equity. In her discussion, Kirsten highlights how each approach impacts ownership structure, financial flexibility, and long-term growth.
Hear from Kirsten Olsen, Managing Director and Head of PWM Private Capital, as she explores the critical trade-offs between taking on debt versus raising equity. In her discussion, Kirsten highlights how each approach impacts ownership structure, financial flexibility, and long-term growth.
Transcript
When you’re building a business funding is one of the most important decisions you’ll make. Two common paths are debt and equity and each come with trade-offs debt financing means borrowing money that you’ll repay overtime usually with interest the upside is you retain full ownership and control of your business your lender doesn’t get a share of your profits debt can also offer predictability fixed principal payments and potential tax benefits but not every business qualifies lenders look at your revenue credit history and business maturity if you are an early stage business or have inconsistent cash flow that debt may be harder to access equity financing on the other hand means selling a portion of your business in exchange for capital you don’t have to repay the money as you would in alone and in addition to capital your investors may bring strategic support networks and expertise to help accelerate the growth of your business but you’re also sharing profits and at times decision making equity means giving up some control and that’s a big consideration the right choice depends on your goals and your company’s growth stage and your appetite for risk debt lets you build your business while maintaining your ownership equity may accelerate growth but it comes with strings know your options and choose what aligns with your goals.
