1 / 7

Advantages and Disadvantages Debt Financing

Typically smaller companies, such as restaurants, manufacturing and retail companies, look for debt financing but they need a good credit score In order to get approved loan by lenders. Upwise Capital is offering pros and cons to Evaluate debt vs. equity financing before making any decisions. For more details visit us now.

Upwise
Download Presentation

Advantages and Disadvantages Debt Financing

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. ADVANTAGES AND DISADVANTAGES D E B T F I N A N C I N G

  2. TODAY'S OVERVIEW MAJOR TALKING POINTS DebtFinancingOverview TypesofDebtFinancing AdvantagesofDebtFinancing DisadvantagesofDebtFinancing U P W I S E C A P I T A L . C O M

  3. DEBT FINANCING OVERVIEW Debtisessentiallyborrowedmoney. Mostofusencountersomeformof debtinourdaytodaylives; mortgages, carfinancingandloans, andcredit cardsaresomeexample. Itisnodifferentforabusiness. Withdebt financing, yourbusinesswouldbeborrowinganagreedamountofmoney fromalenderwhichwillbepaidbackinapredeterminedperiodoftime. Smallbusinessescanuselinesofcredit, workingcapitalloansoranumber ofotherfinancingprograms. Usuallysmallercompanies, suchas restaurants, manufacturingandretailcompanies, willfinddebtfinancing tobemorefavorablefortheirneeds. Inordertogetapprovedbylenders youwilltypicallyneedagoodcreditscore, businesshistory, financial recordsandastrongbusinessplan. Evaluatedebtvs. equityfinancingpros andconsbeforemakinganydecisions. U P W I S E C A P I T A L . C O M

  4. TYPES OF DEBT FINANCING Term Loans Banks, creditunionsoralternativelendersprovidethefullamountof capitalrequestedupfrontandrepaymentsaremadeoveranagreed amountoftime. Credit cards Fundingcomingfromabankorfinancialinstitution. Thereisalimit, usuallybasedoffyourcreditscore, andthemoneymustbepaidback overaperiodoftimewithmonthlypayments. Merchant Cash Advance Businessesthatreceiveamajorityoftheirincomefromcreditcards allowlenderstotakeadailypercentageofcreditcardearnings. Invoice Financing Capitalisgivenupfronttoabusinessinexchangefor guaranteedincomingmoney, fromyourinvoicesandaccount receivables. U P W I S E C A P I T A L . C O M

  5. ADVANTAGES OF DEBT FINANCING Oneofthebiggestadvantagestodebtfinancingisyou maintainownershipandcontroloveryourbusiness. Youkeepyourcompany’sprofits. Loanagreementsaretemporary. Onceyouhavepaidoff yourloanyouarefreefromdebtandcontracts. Aslong astheloanispaidbackintheagreeduponperiodtime andgoodcreditismaintained, youcantakeoutfuture loansifnecessary. Businessdebtsaretaxdeductible. Inthelongruninterestratesonloanswillusuallycost youlessthangivingupapercentageofyourcompany. U P W I S E C A P I T A L . C O M

  6. DISADVANTAGES OF DEBT FINANCING Themoneymustberepaidregardlessofthesuccessofthe business. Startupcompaniesalreadyhavehighexpensesandcan sometimestakeafewyearsbeforeturningoverarealprofit. Monthlydebtpaymentscanputalotofstressonanewbusiness. Toomuchdebtnegativelyaffectsthevalueofyourcompany makingfutureloansdifficult. Somecontractsmayhaveincreasinginterestratesoveraperiod oftime. Yourpersonalbelongingssuchashomes, cars, andpersonal financescanbetakenifusedascollateralfortheloan, andyou failtomakepayments. Lendersmayplaceunfavorablelimitationsonwhattheloancan beusedfor. U P W I S E C A P I T A L . C O M

  7. CONTACT DETAILS WEBSITE www.upwisecapital.com EMAIL ADDRESS funding@upwisecapital.com PHONE NUMBER (646)-837-5522

More Related