Advantages, Does not have to be repaid unless the owner leaves the business, Cheaper than other sources of finance as there are no interest payments, The owners who have contributed the equity retain control over how the finance is used, Low gearing (use the owner's resources and not external sources of finance), Less risk for the business and the owner, Disadvantages, Lower profits and lower returns for the owner, The expectation that the owner will have about the return on the investment, Long, expensive process to obtain funds this way, Ownership is diluted.

Equity Financing

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