Debt Finance ??

Debt finance is essentially a "loan" for a business. Instead of giving up a piece of the company to investors (equity), the business borrows money from an outside source with the promise to pay it back—plus interest—over a set period

How It Works

When a company uses debt finance, it enters into a contract with a lender. The relationship is strictly defined by the repayment schedule and the cost of borrowing (the interest rate).

• Principal: The original amount borrowed.

• Interest: The fee charged by the lender for the use of their money.

• Maturity: The date by which the full loan must be repaid.