Introduction When one intends to start a business, one should focus on how to raise capital and raise money to finance the business operations. Today, many commercial lenders charge differential interest rates for the money borrowed. Some local and international companies specialize in investing in businesses. Such companies have some set rules that allow it to run its plans and enhance mutual understanding. Other logistics like the human power and the business operations should be studied before the parties engage in business. Other factors that should be considered before deciding on debt financing or equity borrowing is the tax situation in the country of interest, the business plan and potential investors (Sawyer and Sprinkle, 2009). Discussion The equity financing is fundamental in ensuring that a person interested in starting a business does not have burden of huge loans on him/her. The business start-up loan depends on the nature of business, the location of the business, the size of the business and the price of goods in the market. A person who intends on starting a business should always do a budget of all his business plans to ensure that he/she has a working figure that can allow effective planning (Sawyer and Sprinkle, 2009). On the other hand, loan repayment can be difficult because of high interest and increased cost of life; thus, equity investing allows a businessperson be free of settling loans that have high interest loans (Kenen, 1964, p.51). Additionally, equity financing allows the two parties to engage in a business that is well-defined by the set rules. For example, when a businessperson drafts a prospectus that discusses issues like losses and profit, the investor can understand when the business plunges in losses. This is from the fact that business investors understand from the start that a business either can blossom or fail. It is always obvious that commercial lenders and some relatives would expect to be repaid back their loan whether the business does well of fails. Thus, borrowing from commercial lenders such as banks can be riskier compared to selling some shares to an investor. It is essential to state that commercial lenders always ask for security like personal properties like title deeds, vehicles and other assets. It is evident that when a debt-financed business fails, the businessperson will loose his/her properties. Borrowing in the form of equity also allows the businessperson to choose whom he/she is interested in working with and financing the business. The businessperson can visit many investors and choose the investor he/she is comfortable to work with. It is fundamental that the businessperson chooses the investor wisely as this will define the business operations. Some investors have stringent terms that can strain the businessperson; hence, equity financing allows the businessperson choose his/her team player wisely. In most cases, borrowing in form of debt does not offer the businessperson with many options. According to Sawyer and Sprinkle, the commercial lenders are some lobby groups that have special interest; hence, they benefit themselves. They do not necessarily have the interest of the business; rather, they focus on what they can benefit from the trade part