Generating money to start a new venture or to expand an existing business can be a challenge for small businesses. There are a number of ways to capitalize a business using debt or equity. After their personal equity contributions, many small-business owners may prefer to utilize some type of debt to fund the business rather than take on additional investors. When chosen wisely, long-term debt financing provides a number of advantages to the business and its owner. Long-term debt financing provides them with access to cash for growth in exchange for periodic installments. How much cash is available to a business will depend on several factors, such as the business' credit history and its debt to equity ratio.
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