After learning more about the business, the bank manager makes him an offer, asking why not open two stores instead of one. For that, the bank manager gives him two options:

$1$st option:

He can open the first store with the capital structure $(80\%$ equity and $20\%$ debt$).$ For the second store, the bank manager will get him approved for $100\%$ of the funds needed, with a project loan from the Royal Bank of Canada under the terms as follows:

Interest rate: Current Prime rate $+4\%$

Loan term: $5$ years.

Payment terms: Quarterly payment

$2$nd option:

The bank manager will become his partner and will buy equity shares in the company. They will be $50$:$50$ partners and own two stores, and $80\%$ will funded with equity while the rest will be funded with Debt.

Explain the benefits and drawbacks of the two options. Would you select one of the options? If yes, which one and why?