The same £250,000 costs £87,500 as debt and £600,000 as equity
Cost of Capital Comparison
Equity, debt and invoice finance priced for the same money over the same period. Equity costs nothing a month, and usually the most by the end.
Cost of Capital Comparison
Equity, debt and invoice finance for the same money over the same period, so the cheap-looking option can be seen properly.
How to read the comparison
Debt and invoice finance cost cash every month and give the money back to nobody. Equity costs nothing a month and a share of everything, forever.
The equity line is the stake times what the company is worth at the end, which is why cheap-feeling equity is usually the expensive option for a company that expects to grow.
The honest comparison runs to the same date. Equity looks free for exactly as long as you refuse to put a future value on the business.
Take the workbook
All three options in Excel with the cash cost by year and the crossover value where equity becomes the dearest.
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