Project Management

Should You Borrow Money To Finance Your Start-Up

Date Added: May 2009
Format: HTML

Leverage is the amount of debt that a company uses to finance its assets. According to the pecking order theory of finance, companies first use internally-generated capital, then borrow money, and finally obtain outside equity. Obtaining outside equity isn't something most entrepreneurs do successfully when they first start their companies. If you're starting a business, you should think about that when formulating your financing strategy.