Debt Vs Equity - Advantages and Disadvantages

Funds are readily available (banks want to lend money - that is how they make revenue and profits)

Owners remain in control of the firm (no need to lose percentage ownership) 

Increased funds through debt leverage operations to increase output (which results in increased revenue and profitability) 

Interest payments are an expense (tax deductable).

Risk of interest rate increases (higher costs of finance)

Security required for substantial debts

Higher levels of debt can lead to long-term solvency issues

Lenders have first claim on liquidated funds (before owners / shareholders) 

Funds not required to be repaid (unless owner leaves / sells share) 

Cheaper (no interest payments but investors keen for profit / returns)

High level of control over how funds used (no conditions from lenders) 

Results in low gearing levels (increased solvency).

Reduced ability to generate revenue / profits (relative to usinf debt too), 

Level of profitability (return on equity) reduced

Less risk = less reward

More difficult to acquire - challenges and difficulties with different views / visions of new owners