- Less burden. With equity financing, there is no loan to repay. The business doesn’t have to make a monthly loan payment which can be particularly important if the business doesn’t initially generate a profit. This in turn, gives you the freedom to channel more money into your growing business.
- Credit issues gone. If you lack creditworthiness – through a poor credit history or lack of a financial track record – equity can be preferable or more suitable than debt financing.
- Learn and gain from partners. With equity financing, you might form informal partnerships with more knowledgeable or experienced individuals. Some might be well-connected, allowing your business to potentially benefit from their knowledge and their business network.