Debt Financing
Definition
Debt financing is when a business raises capital by borrowing money from lenders or issuing bonds. The borrowed funds need to be repaid over time with interest.
Related terms
Interest Rate: The cost of borrowing money, usually expressed as a percentage.
Principal: The original amount borrowed or invested.
Credit Rating: An evaluation of an individual or entity's creditworthiness, which determines their ability to repay debts.
"Debt Financing" appears in:
Study guides (1)
AP Macroeconomics - 4.1 Financial Assets
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About Us
About Fiveable
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Privacy Policy
CCPA Privacy Policy
Resources
Cram Mode
AP Score Calculators
Study Guides
Practice Quizzes
Glossary
Cram Events
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Crisis Text Line
Help Center
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.