The easiest way to raise money is through debt financing, or loans. Commercial lenders such as banks and finance companies tend to be the biggest source of debt financing. Through debt financing, the borrower is able to get funding and maintain control of the business. Lending terms are outlined in advance, and usually include a payback schedule and interest rates.
Equity financing means selling a stake in the business for money.
Basically, the business owner gives up a share of the profits to the investor, and possibly some control of operations. Investors speculate that the business will succeed and that their shares will rise in value. When you think of equity financing, you can think of the stock market, where company shares are bought and sold every day by businesses hoping to raise money. You might also want to consider debenture. It is a type of loan, really a note, that the business owner gives the lender in exchange for money.