All Topics > Business Services > Business Loans and Equity Investments >

Business Loans and Equity Investments New York

How to choose between getting a loan or selling part of your business to an equity investor. Both of these options of raising money for your business are compared to see which would be the best choice for you and your business.

Local Companies

Citibank
(718) 248-2091
One Court Square
Long Island City, NY

North Fork Bank
(212) 818-1028
420 Lexington Avenue
New York, NY

Union State Bank
(212) 614-6870
11 East 22nd Street
New York, NY

Valley National Bank
(973) 305-4005
1455 Valley Road
Wayne, NY

MetLife
(516) 877-7960
100 Ring Road West
Garden City, NY

First Command Financial Planning, Inc.
(646) 789-6787
1230 Avenue of the Americas
New York, NY

New York Life Insurance
(347) 563-8969
420 Lexington Avenue
New York, NY

Creators Media Group
(914) 769-0676
39 Washington Avenue
Pleasantville, NY

UPRS Group, LLC
(888) 660-6740
875 Avenue of Americas
New York, NY

Banco Popular
(212) 417-6718
120 Broadway 16th floor
New York, NY

Provided By:

To raise money for your new business, you have two options: borrow money or sell part of your venture to an equity investor. This assumes, of course, that both options are open to you. In fact, you might not find a lender willing to lend you money or you might have a hard time convincing an investor to put money into your business. But you should nevertheless understand the trade-offs that come with choosing one over the other.

Here's a comparison of the pros and cons of each method of raising money.

Loans

Loans are often better for businesses whose cash flow allows for realistic repayment schedules and can't require a pledge of anyone's personal assets.

Advantages

The lender has no profit participation or management say in your business.
Your only obligation is to repay the loan on time.
Interest payments (not principal payments) are a deductible business expense.
Loans from close relatives can have flexible repayments terms.

Disadvantages

You may have to make loan repayments when your need for cash is greatest, such as during your business's start-up or expansion.
You may have to assign a security interest in your property to obtain a loan, which may place personal assets at risk.
Under most circumstances, you can be sued personally for any unpaid balance of the loan, even if it's unsecured.

Equity Investments

Equity investments are often the best way to finance start-up ventures because of the flexible repayment schedules.

Advantages

You can be flexible about repayment requirements.
Investors are sometimes partners or board members and often offer valuable advice and assistance.
If your business loses money or goes broke, you probably won't have to repay your investors.

Disadvantages

Equity investors require a larger share of the profits.
Your shareholders or partners have a legal right to be informed about all significant business events and a right to ethical management. They can sue you if they feel their rights are being compromised.

Consider Consulting With an Accountant

If you don't already know an accountant specializing in small business affairs, you may want to find one to help you make the decision. Your personal tax situation, the tax situation of the people who may invest, and the tax status of the type of business you plan to open are all likely to influence your choice.

To learn more about financing your business, and everything else you need to know about starting and running a business, get Whoops! I'm in Business: A Crash Course in Business Basics, by Richard Stim and Lisa Guerin (Nolo).

Author: Attorney Fred S. Steingold

Copyright 2008 Nolo
For more information visit Nolo Press

Featured Local Company

Citibank

(718) 248-2091
One Court Square
Long Island City, NY

Read more about Business Loans and Equity Investments

- Finding Profitable Commercial Properties New York

Profitability is the goal for any business pursuit and commercial real estate is no different. When you invest in a commercial property, you are essentially buying a business. Provided the monthly cash flow for a property is positive, consider the other factors that additionally enhance profitability of the property as a business.

- How To Create a New and Exciting Business Model New York
- Help For Small Business New York
- SBA Loans New York
- Commercial Business Loans New York
- Home Equity Lines Of Credit New York
- How To Find Capital New York
- Starting A New Business New York
- Secured Business Loans New York
- Business Financing New York

Regional Articles

- Secured Business Loans New York

Business loans form a significant part of the lending industry. With so many people applying for business loans, you must be wondering how many of them actually get them.

- Commercial Business Loans New York
- How To Find Capital New York
- Finding Profitable Commercial Properties New York
- SBA Loans New York
- Starting A New Business New York
- Help For Small Business New York
- How To Create a New and Exciting Business Model New York
- Business Financing New York
- Home Equity Lines Of Credit New York

Related Local Events

Fundamentals of Investment Adviser Regulation 2009
Dates: 7/17/2009 - 7/17/2009
Location: PLI New York Center
New York, NY
View Details

Private Equity Forum 2009
Dates: 7/13/2009 - 7/13/2009
Location: PLI New York Center
New York, NY
View Details

Movers & Shakers - NY State Budget
Dates: 7/10/2009 - 7/10/2009
Location: Buffalo Niagara Partnership
Buffalo, NY
View Details

Understanding Financial Statements: Analysis and Case Studies in Accounting and Valuation
Dates: 7/1/2009 - 7/1/2009
Location: PLI New York Center
New York, NY
View Details

Response to Ponzi and Other Schemes: Alternative Investment Funds under Scrutiny
Dates: 6/30/2009 - 6/30/2009
Location: PLI New York Center
New York, NY
View Details

Advertising	Food & Beverage	Nightlife
Business Services	Franchise	Online Database
Career	Health	Pets
Cars	Holidays	Real Estate Resources
Computer Hardware	Home Appliances	Retail & Consumer Services
Construction	Home Electronics	Software
Education	Home Services	Technology
Entertainment	Industrial Goods & Services	Telecommunications
Environmental	Insurance	Trade Shows
Family	Internet	Travel
Fashion	Legal	Weddings
Financial Services	Miscellaneous	World History

Advertising	Family	Home Services	Real Estate Resources
Business Services	Fashion	Industrial Goods & Services	Retail & Consumer Services
Career	Financial Services	Insurance	Software
Cars	Food & Beverage	Internet	Technology
Computer Hardware	Franchise	Legal	Telecommunications
Construction	Health	Miscellaneous	Trade Shows
Education	Holidays	Nightlife	Travel
Entertainment	Home Appliances	Online Database	Weddings
Environmental	Home Electronics	Pets	World History