Suppose you head the finance department of a medium size manufacturing company. The business recently received a sizable order for a new product line, however in order to execute this order, large investments in machinery and more personnel are needed. The business has two options: either seek equity investment from a venture capital firm or finance the growth through a bank loan.

(a) In terms of their suitability for the company's expansion proposal, how would you assess and contrast the two funding choices (bank loan vs. venture capital)? [2 Marks]

(b) What financial indicators and factors would you use to decide this?