FOR an entrepreneur looking for capital to expand a business, the question is often framed simply: where can I borrow the money?
But the emergence of the Zimbabwe Entrepreneurship Exchange (ZEEX) introduces another question that may be more important: what type of capital is right for my business?
ZEEX gives small and medium enterprises (SMEs) the opportunity to structure their funding requirements around different instruments, including debt and equity, rather than treating every financing need as a conventional loan.
That distinction matters because debt and equity solve the same problem — providing capital — in very different ways.
Debt allows a business to raise money and repay it over an agreed period without giving away ownership.
Equity involves bringing in an investor as a partner, with the investor providing capital in exchange for an ownership stake and a share in the company's future growth.
The choice ultimately depends on what the entrepreneur wants from the capital and what the business can support.
Debt: Keep ownership, repay the capital
- ZSE gets approval for SME-focused exchange
- Need funding? Let the market invest in your vision through ZEEX
- How to raise capital on ZEEX: A step-by-step guide for entrepreneurs
- Debt or equity? ZEEX lets SMEs choose how they want to raise capital
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For an entrepreneur who wants to raise money without giving up a stake in the business, debt is one option.
Consider a growing business with established customers and predictable cash flow that needs money for a new delivery truck.
Through ZEEX Private Markets, the entrepreneur can structure a debt instrument, raise the required capital from investors and repay it over an agreed period.
The advantage is that ownership stays with the entrepreneur.
The trade-off is a repayment obligation — the business needs confidence that future cash flows will be enough to service it. The truck, for example, could help the business deliver more, sell more, and generate the cash needed to repay the loan.
But debt on ZEEX doesn't have to mean raising money for a long-term asset. Invoice discounting offers another route to debt-style working capital.
Imagine a business has supplied a large supermarket with US$100 000 worth of goods and holds an accepted invoice, but the supermarket won't pay for 60 or 90 days.
Instead of waiting, the SME can list that invoice on the ZEEX Invoice Discounting Marketplace and seek funding against it. An investor provides the money upfront at an agreed discount.
When the supermarket eventually settles the invoice, the investor receives the agreed amount.
For the SME, the benefit is immediate working capital without waiting on the customer.
So within ZEEX, an entrepreneur looking to retain ownership can choose between debt-based solutions depending on the need — growth capital through Private Markets, or invoice discounting to unlock cash tied up in unpaid invoices.
The underlying principle is the same: raise the capital you need today and repay it rather than giving away ownership of tomorrow's business.
Equity: Bring in a partner
Equity works differently.
Instead of borrowing money that must be repaid, an entrepreneur can offer an investor a stake in the business in exchange for capital.
The investor becomes a partner in the company’s future.
This can be particularly attractive for businesses that need patient capital to pursue a longer-term growth strategy.
An entrepreneur may decide that giving up 20% or 30% of the company is preferable to taking on debt with regular repayments. If the business grows substantially, both entrepreneur and investor benefit.
The entrepreneur retains majority ownership while gaining capital and, potentially, an investor who brings more than money to the table.
The key difference is straightforward. Debt means paying the capital back; equity means sharing the future.
Under ZEEX, the equity option falls under the Public Markets platform, where eligible businesses can raise capital by offering securities to a wider pool of investors in exchange for an ownership stake.
Unlike debt, this capital doesn't need to be repaid in the same way—instead, investors participate in the company's future growth and returns as shareholders.
That makes equity particularly relevant for businesses that are seeking patient, long-term capital to fund expansion, rather than taking on a fixed repayment obligation.
Which one is right for an SME?
There's no universal answer.
A business with reliable cash flow and a clear ability to service repayments may find debt attractive.
A business with strong growth potential but less predictable cash flows may prefer equity — particularly where the entrepreneur wants an investor willing to take a longer-term view.
This is why having the choice matters.
Rather than approaching the capital market assuming funding must take the form of a loan, entrepreneurs can start by asking what their business actually needs: Is the funding for a specific asset that will generate additional cash?
Is it needed to expand into a new market?
Does the business need a strategic partner to support a longer-term growth journey?
The answers point toward different forms of capital.
ZEEX brings the choices together
The broader proposition of ZEEX is that entrepreneurs can use the platform to present different financing needs to investors.
Its Private Markets let businesses raise capital without necessarily becoming publicly listed, while its Public Markets offer eligible companies a route to a wider pool of investors.
Invoice discounting provides another route for businesses that have already generated revenue but are waiting on customers to settle invoices.
This means an SME can think about capital according to its own circumstances rather than simply asking for a loan.
A manufacturer buying equipment could consider debt.
A fast-growing technology company seeking patient capital to expand could consider equity.
A supplier waiting 90 days for a large customer to settle an invoice could use invoice discounting to unlock working capital.
The financing need is different in each case — and so is the appropriate instrument.
A different conversation about funding
For Zimbabwe’s SMEs, this represents an important shift in how entrepreneurs can think about raising capital.
The starting question doesn’t always have to be “Will someone lend me money?”
It can instead be: “What kind of capital will help my business grow?”
That is particularly relevant for businesses that have historically relied on personal savings, retained profits, bank loans or informal financing.
ZEEX creates a regulated marketplace where entrepreneurs can present their capital requirements and investors can assess opportunities based on the information available.
The entrepreneur therefore has a more deliberate choice to make.
Do I want to borrow and retain ownership, or bring in a partner and share the future growth of my business?
For some SMEs, the answer may be debt.
For others, it may be equity.
And for businesses with a different financing need altogether, ZEEX offers other routes.
The point is not simply to find money — it is to find the right capital for the business.
