banner_ad

Equity v/s preference v/s loan from shareholder

Others 715 views 4 replies

Dear Member

 

Can anyone please provide me with Comparative analysis of capital injection by way of Equity V/s Preference V/s Loan from Shareholder. Which one is better & why.

Replies (4)

hi, it depends on the  foundatin &strength of company usually equity capital is preferable but according to cost of capital loan is preferable 

hi its like that if market is like that where heavy demand is available, and you are able to sells all of your production. then i can say use much portion of loan becuase its tax dedctible item... and if if there is market like of recession (means very less demand) then you need  much portion of equity in your capital structure..  preference capital only to be when you are not able to raise funds via equity & loan...

many other factors affect this decision:

1. market condition ( as i mentioned earlier its a key feature)

2. working capital requirement

3. interest rates on loan

4. demand,supply ratio of your product.

5. risk taking capacity

6. current production capacity  utilization v/s probable prod. cap. utilization

7. sales capacity

.. there may be many other factors... other views are welcome...

regards- Lokesh Pokharna

Thax, but Kindly let me know w.r.t Private Limited Co.

if  your company is p .ltd ,. then your company cant raise funds via issuing equity shares to public , hence you need to borrow money eihter as a loan or internal equity..  if u unable to raise maoney via fresh equity then you need to borrow money from banks, fi as a loan.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
19 May 2026
Fundraising Expert

MentorsWorld Ventures Private Limited

Ahmedabad

Others

View Details
Company
04 June 2026
Semi Qualified CA

Goyal Puneet & Associates

New Delhi

CA Final

View Details
Company
22 May 2026
U.S. Financial Reporting & Consolidation Manager

Karia Overseas

Ahmedabad

CA

View Details
Company
18 May 2026
MIS Executive

Primarc Pecan Retail Limited

Mumbai

B.Com

View Details
Company
21 May 2026
Associate

PWC

Kolkata

CA

View Details
Company
Featured 26 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
ARTICLESHIP 08 June 2026
Internal & Taxation Article

O P Bagla & Co LLP

New Delhi

CA Inter

View Details
Company
29 May 2026
Accounts assistant

Shubh Consultancy

Mumbai

Graduate (Any)

View Details