Equity finance is a great way to raise capital for your business. It’s when people put money into your business through the purchase of stocks and buy into it. These people are called investors, because they do just that: they invest into your business and expect a share of your profits.
Leveraged finance is the decision to acquire debt that is more than average or normal rates in hopes of greater return on investment and profits. It’s done to purchase investment assets, under the assumption that those assets will go up in value.
It’s a useful way of maintaining ownership of the company, repurchasing shares, working towards a buyout or invest in a self-sustaining cash-generating asset. However, it is often risky because of the effects it has on a company’s operations and finances.