In some the buyer has the title but there is a charge on the car levied by the financer who gives the car to him on hire-purchase basis, whereas in some others the title remains with the financer. If for some reason, the business does not make enough profits or is going through a loss, there is a lot of pressure on the business owner to repay, as an increased time period of repayment means an increased interest on the loan. This is the main difference between the two financing methods. Debt financing can be both, short term as well as long term. You must earn a good salary into your bank account. In equity financing, the investor or the venture capitalist has ownership rights, as well as decision-making power, in running the business. Second important thing is your repayment ability means your monthly salary and collateral or security conditions. The business owner has to pay back this loan or debt within a pre-determined time period along with the interest incurred on it.
Global finance journal subscriptions will mean that reaffirm the fact that you know to really make the most of the market. However, it is recommended that when you plan to make a shift of the job and you have already taken this facility of car finance then you shall ask about the same from the next employer during the negotiations for the salary package. It is one part of the middle class trifecta the cool car along with the comfortable job and the own home. However, there are couple of things depends when you take external financial help. Attracting direct foreign finance has a number of advantages, ie long terms, cheap resources and no pledge. The revenue which the business makes is used to repay the lenders. Once the loan is repaid, the relationship between the lender and the business owner also, ends in debt financing.
The easy availability of the car finance is one of the major reasons why the car sales have picked up phenomenally. It is an easy way to grab external financial help and meeting car dreams without hitting your pocket. On the other hand, in equity financing, if the business generates huge profits, the investor and the venture capitalist have to be paid back money, which is much in excess of the amount they invested. The players and leaders in this specialized area of financing tend to be banks and specialized independent finance firms with significant capital and expertise. In equity financing, the financier has a say in the functioning of the business as well. Even the government supports the people in meeting this aspiration by way of allowing incentives in taking the finance facility for the car. In the latter case, the lease agreement is executed with the financer.