Explains S. Viswanatha Prasad, managing director, Caspian, a company that provides collateral free customised loans to professionally managed small or mid-market companies operating in high impact sectors. “The key difference between debt funding and equity funding for businesses is that debt is non-dilutive in nature for the entrepreneurs or owners. When an entrepreneur receives Equity Capital, he or she reduces their own stake and control of the business. Debt gets priority in payments and hence businesses have to bear less cost in comparison to equity.”