Sweat Loan
Content
Definition
A Sweat Loan is an agreement where repayment may involve providing services or labor in lieu of traditional financial repayment, often utilized in early-stage startups with limited cash resources.
Usage and Context
A sweat loan allows a startup to repay a loan with services or labor rather than money, often used in the early stages.
Frequently asked questions
- What does syndication mean in investment? Syndication in investment means combining resources from multiple investors to finance a larger deal.
- What is an example of sweat equity? An example of sweat equity is a co-founder receiving shares in a company instead of a salary in exchange for their work and contributions.
- Is sweat equity a good idea? Sweat equity can be a good idea as it allows contributors to gain ownership without upfront capital, but it can lead to dilution and disputes if not managed properly.
Benefits
A sweat loan allows repayment through services or labor instead of money, often used by early-stage startups.
Conclusion
A sweat loan allows startups to repay loans with services or labor instead of money.
