Equity financing is a method of raising capital for a company by selling shares. Companies in need of capital for growth can raise funds by selling shares to investors, giving the investors a certain level of ownership of the company.
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Liquidation is a process through which a business is closed, with its remaining assets distributed to creditors and shareholders.
Bootstrapping is the process of starting and growing a business using a combination of savings and cash flow.
Debt financing is a method of raising capital in which a company sells certain debt instruments to investors. In exchange for money, the company repays both the principal (the total amount of money that’s borrowed by the company) and interest on the debt.
Collateral is a pledge of a specific asset made by a borrower to their lender. In order to borrow money, the borrower might need to pledge a specific piece of real estate, equipment or another asset to the lender as protection. This asset is referred to as collateral.