Capital Structure

9/23/2025 pdw

It often takes money to make money. You can't fill a bakery's shelves, hire workers or lease a location without money. This section covers the two major categories of financing: equity financing and debt financing.

Capital structure refers to how a company finances its business with equity and debt. One structure might be to have 90% of the business funded by a bank loan and 10% from your mom. Or maybe you are debt averse, so you fund the business with your savings and just grow more slowly. However you decide to fund the business, that's your capital structure.

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