Recurring revenue lending this way of debt financing
This way of debt financing is especially loved by SaaS companies or basically any business that has mostly ongoing revenue. They get debt based on a percentage of their monthly recurring income. Equity financing is all about raising funds by selling shares of a company. The company gets money in return for some ownership, and the new equity holder becomes part-owner, which lets them gain from future dividends and cash flows, or to sell their shares when they want.