Non-dilutive financing refers to funding obtained by a company without the need to issue additional equity shares or dilute existing ownership stakes.
Unlike equity financing, which involves selling ownership shares to investors, non-dilutive financing allows companies to raise capital without sacrificing ownership control. Non-dilutive financing options typically include grants, loans, subsidies, government incentives, and other forms of debt or non-equity funding. These sources of funding enable companies to access capital while maintaining the current ownership structure and avoiding the dilution of existing shareholders’ ownership percentages.
Non-dilutive financing is especially beneficial for companies seeking to preserve control, retain ownership value, or avoid shareholder dilution.