Avoid Costly Mistakes: Mastering Debt & Equity Financing

Key Takeaways:

1. Debt Financing: Borrowing allows businesses to retain control but comes with the responsibility of repaying loans with interest.
2. Equity Financing: Selling ownership stakes brings in funds but can impact decision-making and profit sharing.
3. Inflation’s Impact on Cash: Cash loses value over time due to inflation, which must be considered in financial planning.
4. Proactive Financing: Secure funding under favorable conditions instead of waiting for urgent needs.
5. Financial Analysis Matters: Regularly review finances to decide the best time and method for raising funds.
   
   

Chapters:

Timestamp Summary

0:00 Introduction and Cost of Capital Overview

0:26 Tax Time and Business Growth Discussion

0:51 Understanding Debt in Business

2:06 Debt Examples and Considerations

2:40 Advantages of Debt Over Equity

4:09 The Cost of Cash and Inflation

4:47 Exploring Equity and Partnership Considerations

7:01 Insights on Funding and Patience

 

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Phillip Washington, Jr. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.