The Small Business Forum
Equity
- Equity is the owners’ funds invested in the business, as share capital. The owners aim for profit.
- It is long-term, held for the life of the business and is suited for initial fixed assets and part of working capital.
- The equity investors share in dividends when the business makes a profit. They equally carry the risk of loss if the business does not do well or fails.
- Normally require to participate in management.
- Equity funds are required particularly for start-ups or at the early stage of a business. Part may finance permanent working capital.
- Equity is normally financed from savings or injection by other investors.
Comments, Questions and Suggestions welcome.
drkibuka@thesmallbusinessforum.co.ke
+254-729524219
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