Debt Financing
/ˈdɛt ˈfaɪˌnænsɪŋ/
Definitions
- (n.) The method of raising capital through borrowing, typically by issuing bonds or taking loans, with an obligation to repay principal and interest.
The company secured growth capital through debt financing rather than equity.
Related terms
Commentary
Debt financing is distinguished from equity financing by its repayment obligation and interest terms; clarity in drafting loan and bond agreements is key to defining rights and obligations.
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