Banks are conservative when lending money, that is why small business choose banks to get loan.

In using choosing equity financing, there is a big chance that you might lose control to your business as stockholders increase their share

Banks haves fixed terms and interest rate

If you borrowed loan from banks, tax are deductible

In Equity Financing, your credit history is not needed

In debt financing, if your business got bankrupt you are still obligated to pay the said debt

Your credit rating, can affects your chances in making loans

Loan purposes are need to business loan requirement?

You need at least 3 - 5 years as proof of profitable operations

If you have a small medium enterprise you need an annual revenue of 5 Million and above

Character means checking your past financial transactions

House and Lot is an example of bank collateral

Lenders use 5C to estimate the amount they will approved for your loan

Lenders also consider how well the industry is performing before they approved a loan

Bonds are example of Debt Financing

Face Value should be paid after maturity date

Coupon Rate is not fixed return

Cash flow is important in Debt Financing

Rural Bank are government sponsored

There are more loan requirements from banks than non banking institution

You should be a member of non financial institution before you could make a loan

Equity Financing is mostly used when a companies have a long-term need for investment

The face value of bonds can be different from it current amount

Bonds interest could also be paid monthly as bank loan interest