Equity Loan or Equity Capital. How To
Get Money You Don't Have to Pay Back… Ever!
You can get money you don't have to pay back through the
magic of equity loans or equity capital. It's done everyday.
How can you do it? It's really easy when you know how! To
help you understand the process, you should learn the
following two terms.
First……
Debt Financing Or Debt Capital
This is the money you borrow to start or run your
business. It's called debt capital because it is borrowed
money that must be repaid. Of course the object is to use it
in such a way as to make enough money to be able to make the
payment from its generated earnings and still have enough
left over for a profit.
Second…
Equity Financing Or Equity
Capital
This is the money you "get" to put into your business
which doesn't have to be repaid… ever. Why doesn't it have
to repaid? For a simple reason.
See, those who put up this kind of money become part
owners of the business. These investors contribute to the
long-range capital of the business. They own an interest or
shares. They show proof of ownership by a paper certificate
(stocks) you issue them. They are paid a proportion of the
profits from the business.
As contrasted with loans, equity loan or equity capital
has no fixed required period of repayment, no predetermined
fixed interest as a rate of return and no collateral
pledged. In pure theory, the capital is subordinated to all
loans so that the greater the capital, the greater the
further borrowing capacity.
The Best Of Both Worlds
In effect, with equity money, your cash-flow is not
strained. Debt money on the other hand requires a monthly
payment to cover the principal and interest. All this must
come from your profits. Equity money only requires a
percentage of the profits which is usually much much less
than the payments on a loan. This leaves more money for
yourself, plus more money to plow back into your business to
make money and to build wealth fast.
If you want to consider this avenue of financing to seek
the funding you need for your business or real estate
project, here are some of the questions you should think
through… How much to seek? What to give in return? Who will
be in control of the business? Will your investor be a
working or a silent partner? And, more importantly, How and
where can you find the individuals or firms willing to put
up "Equity Loan" or "Equity Capital" in venture?
For additional insight,
complete the form, download our material including the
newsletter and sign up for our consulting services.
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