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Now that we know the pros and cons of both equity and debt financing, let's look at when each type of financing works best for us.
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Let's consider the advantages and
disadvantages together.
0:00
With equity financing, there is a fair
amount of advantages.
0:00
You don't [SOUND] have to pay back the
money.
0:04
This is a big deal.
0:05
You're not taking on the same amount of
risk as if you were borrowing the money.
0:07
Most [SOUND] investors give you the money
with long-term expectations, so
0:10
you can put that money to good use without
worrying about
0:14
generating profit immediately.
0:18
The profits [SOUND] generated with this
money won't go towards paying off a loan,
0:19
another plus.
0:24
You have money in the bank.
0:24
Finally, if your [SOUND] company fails,
0:26
you are in no obligation to pay off a
loan.
0:29
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