{"id":52631,"date":"2024-02-20T09:36:52","date_gmt":"2024-02-20T17:36:52","guid":{"rendered":"https:\/\/financer.com\/?post_type=wiki&p=52631"},"modified":"2024-03-05T08:52:36","modified_gmt":"2024-03-05T16:52:36","slug":"debt-financing","status":"publish","type":"wiki","link":"https:\/\/financer.com\/loans\/articles\/debt-financing\/","title":{"rendered":"Debt Financing Explained: Pros, Cons, and Alternatives"},"content":{"rendered":"\n

What is Debt Financing?<\/h2>\n\n\n\n

Debt financing is a method by which a company receives capital by borrowing money from another party and agreeing to repay it at a later date, usually with interest. <\/p>\n\n\n\n

Although debt financing can be used by individuals (think mortgages<\/a> or auto loans<\/a>), it’s a term particularly associated with business lending. <\/p>\n\n\n\n

Companies, rather than selling off ownership through shares like in equity financing<\/a>, secure needed funds through various lending arrangements. Lenders in this role become creditors, expecting regular payments (often, monthly) based on the terms of the debt agreement.<\/p>\n\n\n\n

Real-Life Examples of Debt Financing<\/strong><\/h4>\n\n\n\n