Equity Loan or Equity Capital. How To Get Money You Don't Have to Pay Back… Ever!

You can get money you don't have to pay back through the magic of equity loans or equity capital. It's done everyday. How can you do it? It's really easy when you know how! To help you understand the process, you should learn the following two terms.

First……

This is the money you borrow to start or run your business. It's called debt capital because it is borrowed money that must be repaid. Of course the object is to use it in such a way as to make enough money to be able to make the payment from its generated earnings and still have enough left over for a profit.

Second…

This is the money you "get" to put into your business which doesn't have to be repaid… ever. Why doesn't it have to repaid? For a simple reason.

See, those who put up this kind of money become part owners of the business. These investors contribute to the long-range capital of the business. They own an interest or shares. They show proof of ownership by a paper certificate (stocks) you issue them. They are paid a proportion of the profits from the business.

As contrasted with loans, equity loan or equity capital has no fixed required period of repayment, no predetermined fixed interest as a rate of return and no collateral pledged. In pure theory, the capital is subordinated to all loans so that the greater the capital, the greater the further borrowing capacity.

In effect, with equity money, your cash-flow is not strained. Debt money on the other hand requires a monthly payment to cover the principal and interest. All this must come from your profits. Equity money only requires a percentage of the profits which is usually much much less than the payments on a loan. This leaves more money for yourself, plus more money to plow back into your business to make money and to build wealth fast.

If you want to consider this avenue of financing to seek the funding you need for your business or real estate project, here are some of the questions you should think through… How much to seek? What to give in return? Who will be in control of the business? Will your investor be a working or a silent partner? And, more importantly, How and where can you find the individuals or firms willing to put up "Equity Loan" or "Equity Capital" in venture?

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