Which Is Better For Your Business? A Loan Or Investor…

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Almost anybody runs the other way when you mention the word “debt,” but sometimes it’s a good idea to understand how to use it to your advantage. Borrowing money instead of seeking additional investment capital to finance operations and growth can be healthier for your business long term.

Let’s uncover the investor vs. loan options available to find out which is better for your business.

What Are Business Loans?

A loan is when you borrow money from an outside source or an individual and agree to pay it back on a certain schedule with interest.

Pros:

• Loan debt is flexible and terms can be set up to match your specific needs.
• Loans don’t dilute an owner’s equity in the business, and lenders don’t have any stake in the business.
• This type of debt won’t have a lasting impact on your company after you’ve repaid the loan.
• Interest on loans is tax deductible. Many business owners don’t think about this when considering taking out a loan for growth demands.

Cons:

• Loans are fixed obligations that must…