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To Borrow or Not to Borrow

For many new business owners, that is the question.

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This story appears in the September 2002 issue of Teen Startups.

(YoungBiz.com) - Cash, moolah, dough, greenbacks--everyone needs it, especially a first-time entrepreneur. You could have a great idea, a thorough business plan and customers just waiting for you to open your doors, but if you don't have the funds, you can't get your business off the ground.

So what's a 'trep to do? Unless you want to raise the money yourself through part-time jobs, yard sales and the like, there are basically two ways to finance a new business: debt financing, usually through a loan or credit card, and equity financing, in which investors buy "stock" in your company. Both have pros and cons, as 'treps Angeil Brown and Dan Villa recently found out.

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