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Permanent financing is a Long term debt or equity financing. This type of financing is usually used for the construction or purchase of long term assets such as buildings or heavy machinery. Since the return from an assets is distrubted over a long period of time, it reduces the risk of a principle payoff not being paid off.

Long term debt financing involves borrowing money from an outside source to finance a project. Equity financing involves using company assets to get funding for certain projects. Sometimes ownership stake in a company can be given up in order to raise capital for a company. Each option has its positives and negatives so the business owners must figure out what is right for their business.


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