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    Equity and Debt Financing

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    Can someone please identify ways to finance a small business cafe? Also, compare and contrast the benefits and challenges of the methods you mentioned. Lastly, could you describe the financial statements and how they will be used for the business? Thank you!

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    The ways to finance a small business café would be either through debt finance or through equity financing. Debt financing allows the owner to borrow money to finance the café and also retain full control of the café. The owner will have to pay interest on the loan and if he or she default will lose the business and be in debt, but this is preferable for small businesses' that are starting anew as they can obtain competitive interest rates on loans. The most appealing facet of debt financing is ...

    Solution Summary

    This solution of 354 words discusses debt financing vs equity financing by defining both terms and giving scenario and examples.