Is it better that your small business has a loan or has shareholders?
Starting a small business can be expensive. There may be a requirement for office space, stock will usually be required and there are ‘hidden’ costs such as fuel for the car to go out marketing the business. Many business owners will use savings to cover some of the early costs but most businesses will need quite a large lump of cash to keep them going for the first 6-12 months while they become established. The two main ways of getting this cash is through debt or equity. Let’s look at the good and bad points of each.