Beruflich Dokumente
Kultur Dokumente
Short-Term and
Long-Term Funds
Debt and Equity
Financing
Debt Financing can be in the form
of borrowing from banks or other
lending institutions or issuance
debt securities like commercial
papers and bonds. It can also be in
the form of advances from
stockholders to expedite the
process of raising funds.
It creates a contractual
obligation for the borrower to
pay the interest and the
principal. Payments have to be
made on time because unpaid
interest and principal lead to
penalties and more interest.
Benefits of debt financing: