Funding
What are the different types of funding ?
There are a number of types of funding available and each funder will have their own parameters as to what minimum level of funds they will lend on completion and also, possibly a minimum level of ebitda for a business before it can be considered for funding.
There are 2 primary types of lending – debt and equity.
Debt is essentially a loan with a fixed interest rate paid back over a fixed period of time. The loan repayment covers both the capital and the interest element. It is often possible to achieve a capital repayment holiday (CRH) at the start of the loan so the repayments are reduced for a period of time often 3 or 6 months. Equally the debt lender may include a “bullet” payment at the end of the final year, which means that a dis-proportionately large lump of the original capital sum borrowe