When we think about investment, there is always doubt. What is the difference between debt investment and equity investment? Let’s learn more about it. What does investor get from both? Debt investment investors receive interest with principal amount at the end of the period. However, they are having no control on ownership. In case of Equity investment, Investors are the owner of the company & they hold control on ownership.
Debt Investors get interest payment and principal repayment at the end of the term as per the terms & condition of the agreement. But equity investors only get dividend, if it is issued.
Interest payment is the only gain on debt investment. Equity investors gain from increase of market value of shares. When company makes profit from business, market value of shares increases.
Debt investment gives no control on company’s decision making. Equity investors are the owners of Company. They hold control on the company, as per their percentage of share.