Financing General Partnerships

A general partnership is an association of two or more parties to operate a business for profit. The partners raise equity funds through their own capital contributions, by adding a new partner, or by restructuring the relative ownership interests of the existing partners to reflect new contributions. Debt financing for general partnerships is similar to financing for sole proprietorships, because the individual creditworthiness of the owners largely determines the business's creditworthiness.

Advantages of a partnership include:

Disadvantages of a partnership include:

For more information on partnerships and partnership agreements, see our discussion of establishing a general partnership.