Essay: Equity financing

Sample Essay

Equity financing can also involve selling shares of the company, however this can lead to increased number of stakeholders but this is deemed more desirable than debt financing. And then finally, we have government programmes that often propose various plans to stimulate entrepreneurships and success in businesses. Government programmes are a beneficial way to provide financing for the company, the government provides subsidies that are sufficient to finance the entire business project for the company and since the primary aim for the government is to stimulate business activities and encourage other people to get involved in the commercial stratum of the society. (Bouchaud & Potters, 2003)

However, there are certain barriers because the amount of subsidies provided depends on the size of the business, turnover and most of the time government grants are given on a first-come-first-serve basis therefore, often businesses are disadvantaged when faced with these problems. Therefore, if the business needs to flourish in the next five or 10 years, it has to be active in the stock market that could highly beneficial for all the parties involved in the business ventures.  (Bouchaud & Potters, 2003)

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