The lender has no management say or direct entitlement to profits in your business.

Investors are sometimes partners or board members and often offer valuable advice and assistance.

Your only obligation to the lender is to repay the loan on time. Loans from close relatives can have flexible repayments terms.

You can be flexible about repayment requirements.

Interest payments (but not principal payments) are a deductible business expense.

If your business loses money or goes broke, you probably won't have to repay your investors.

You may have to make loan repayments when your need for cash is greatest, such as during your business's start-up or expansion.

Equity investors require a greater share of your profits than interest on a loan.

You may have to assign a security interest in your property to obtain a loan, which may place your personal assets at risk.

Your investors have a legal right to be informed about all significant business events and a right to ethical management.

Under most circumstances, you can be sued personally for any unpaid balance of the loan, even if it's unsecured.

Your investors can sue you if they feel their rights are being compromised.