Lesson 2 of 8

Equity: the first layer, and how much borrowing it can carry

Equity is the money that stands behind every other source of funding. This lesson explains what counts as equity, how leverage is measured, why small-loan portfolios call for more equity than bank portfolios, what minimum capital does, and how fast a lender can grow on its own profits before it needs new owners' money.

Published 3 November 2026