Equity Investments in Small Businesses

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9th March 2021
Investment in a small business is the best way for it to grow. It is a way to nurture and cultivate a business in the right direction. Investment in a small business can be in the form of either equity or debt. Equity investment entails the exchange of money for a percentage of ownership and profits. Debt investment on the other hand involves the lending of money to the business for fixed interest.

When you seek equity investment in your business, you are giving away an ownership stake, or a piece of your business in exchange for the sum received. Equity investment provides you with capital which is mostly in the form of cash. This is in exchange for a percentage of the profits or losses. The business can make use of this cash in any number of ways. These can be for expansion, running daily operations, buying an asset, reducing debt, or even for hiring employees.

The percentage of the business that you need to give away to the investor is often proportional to funds pumped in. In case of an existing business, the percentage stake can depend on several factors such as the overall valuation of the business, additional benefits brought in by the investing company such as expertise and the like.

If you are seeking business investment in Portsmouth, PPG is a pioneering holding and investment company that specialises in transforming the prospects of small to medium-sized UK businesses that are currently not achieving their full potential, or who are in immediate need of financial support. Not only do we provide financial support but also management expertise that will help you grow and create significant value for your company.