Business equity represents ownership in your company and plays a major role in shaping your financial health. This guide breaks down what equity and equity financing are, how they work, and the different types of business equity. If you're looking for capital without giving up equity, we’ll also explore how Boundless can help you find alternative financing options tailored to your business needs and goals.
Simply put, equity is the value of ownership in your business. Depending on your business structure, equity can belong to you as the owner, your shareholders, or your partners. Understanding your business’s equity is essential because it impacts everything from attracting investors to making strategic decisions for growth.
Equity is a snapshot of your business’s financial health. It changes as your assets or liabilities increase or decrease.
Business owners should also keep in mind that equity can affect decision-making, especially when raising capital or issuing new shares. Issuing new shares, for example, may dilute your ownership but can provide much-needed capital for expansion. Understanding these dynamics helps you make better financial decisions and plan for the future.
Equity financing is the process of raising capital through the sale of shares. This can be a useful option for funding expansion or managing cash flow, but it has advantages and drawbacks.
Pros:
Cons:
If an equity financing doesn’t seem like a right for your business, here are some alternative financing options:
If you're looking for financing options that won't dilute your ownership, Boundless can help. We understand that setting your business up for success requires both strategy and the right financial support. Boundless simplifies the process by connecting you with tailored financing solutions from our network of 120+ lenders.