Asked by Annie Kay Cumberland Elliott on Apr 27, 2024
Verified
Two types of funds are available to the small business owner: debt and equity.
Debt
An amount of money borrowed by one party from another, often with the agreement that it will be paid back with interest.
Equity
Ownership interest in an asset after deducting all debts associated with that asset, highlighting a financial stake in a company or property.
- Distinguish between the two types of funds (debt and equity) available to small business owners.
Verified Answer
JM
Jolene MaciasApr 29, 2024
Final Answer :
True
Explanation :
Debt financing involves borrowing money that must be repaid over time, usually with interest, while equity financing involves raising money by selling shares of the company, thus giving up a portion of ownership.
Learning Objectives
- Distinguish between the two types of funds (debt and equity) available to small business owners.