Business, Legal & Accounting Glossary
Financing by selling bonds, bills or notes to individuals or institutions.
Debt financing refers to the borrowing of funds in order to finance a purchase, acquisition or expansion. Debt financing applies to both individuals as well as to businesses and corporations. For businesses and corporations debt financing often involves the selling of notes, bonds, mortgages or other debt instruments. The individuals and financial institutions which provide the debt financing become creditors. Since debt financing involves borrowed funds, debt financing must be repaid, typically in instalments and with interest. The interest that must be paid on debt financing is determined by the creditworthiness of the borrower, the intended use of the funds, and by the current financial climate. Businesses and corporations find debt financing attractive because the interest paid is tax-deductible. The opposite of debt financing is equity financing.
The debt financing was a wise strategy to leverage the company was we were able to use the funds optimally.
We had to practice some debt financing, which was important for us and allowed us to do different things in our business.
My boss was confident that we would be able to use debt financing to fund our new acquisition, and asked me to find some banks who would be wiling to buy our bonds or notes.
EBITDA
EBIDTA
permanent financing
internal measure
Earnings Before Interest, Taxes, Depreciation and Amortization
irrelevance result
equity financing
bankruptcy cost view
equity ratio
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Debt Financing are sourced/syndicated and enhanced from:
This glossary post was last updated: 29th October, 2021 | 0 Views.