What Are Business Equity Loans?
The so-called equity financing means that shareholders of equity financing enterprises are willing to give up part of the ownership of the enterprise and introduce new shareholder financing methods by way of corporate capital increase.
Equity financing bank loan
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- Chinese name
- Equity financing bank loan
- Category
- Debt financing
- Features
- Long-term, irreversible, unburdened
- Service object
- Registered in Shanghai and set up a company for one year
- The so-called equity financing means that shareholders of equity financing enterprises are willing to give up part of the ownership of the enterprise and introduce new shareholder financing methods by way of corporate capital increase.
- Divided into broad categories, there are two types of corporate financing methods, debt financing and equity financing. The capital obtained by equity financing does not require the company to repay principal and interest, but the new shareholders will share the company's profits and growth with the old shareholders. The characteristics of equity financing determine the breadth of its use. It can not only enrich the working capital of the enterprise, but also be used for investment activities of the enterprise. Debt financing refers to the financing of enterprises by borrowing money. The funds obtained by debt financing, the enterprise The interest of the funds must be borne first, and the principal of the funds must be repaid to the creditors after the loan expires. The characteristics of debt financing determine that its use is mainly to solve the problem of shortage of working capital of enterprises, not to be used for capital expenditure.
- Long-term
- Funds raised through equity financing are permanent, have no expiry date and do not need to be returned.
- Irreversibility
- Enterprises do not have to repay the principal in equity financing. Investors who want to recover the principal need to rely on the circulation market.
- Unburdened
- Equity financing does not have a fixed dividend burden. Whether or not the dividends are paid depends on the company's operating needs.
- Clients: Companies registered in Shanghai for one year
- Amount: depending on the specific assets and liabilities of the enterprise and the operating conditions
- Duration: 1-6 months [1]