Equity vs Debt: Cost of Capital Calculator
Compare the total interest cost of a business loan against the 5-year cost of selling equity, to see which route to capital actually costs less.
Financial Projections
Input your funding needs and forecast.
Projected average net profit per year.
Default 18% is an illustrative estimate — actual rates vary by lender and risk profile.
Cost Comparison
Debt: total interest over your loan term. Equity: profit share over 5 years. Illustrative estimates only.
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Total Interest (Illustrative)
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Profit Share Given Away
All figures are illustrative estimates only — not a quote, offer, or financial advice.
Beyond the Numbers
The "Real" Cost of Your Decision
Control & Autonomy
Debt: You retain 100% control. The bank doesn't vote.
Equity: Investors get voting rights and a say in major decisions.
Risk Profile
Debt: Must be repaid regardless of revenue. High monthly cash flow pressure.
Equity: No monthly repayment. Risk is shared if the business fails.
Strategic Value
Debt: Just money. Transactional relationship.
Equity: "Smart Money." Investors often bring networks, mentorship, and experience.