The-definition.com

Definition

Debt financing

 Debt financing is getting a loan. The most common sources of debt financing are commercial banks and Small Business Administration (SBA) guaranteed loans. The types of bank loans and SBA guaranteed loans available to entrepreneurs. Money “loaned” to an entrepreneur or business venture that must be repaid with interest at some point in time. The obligation to pay is usually secured by property or equipment bought by the business, or by the entrepreneur's personal assets. Banks are not investors. As a result, bankers are interested in minimizing risk, properly collateralizing loans, and repayment, as opposed to return on investment and capital gains.


Debt financing is the borrowed funds that entrepreneurs must repay.

Share it:  Cite

More from this Section

  • Functional Conflicts
    Functional Conflicts that support a group’s goals and improve its performance. ...
  • Telecommuting
    Telecommuting is a job approach in which employees work at home and are linked to the ...
  • Grand Strategies
    Grand strategies, often called master or business strategies , provide basic direction ...
  • Social entrepreneur
    An individual or organization who seeks out opportunities to improve society by using ...
  • Asset Intensity
    Asset Intensity is the number of assets needed to generate the given amount of sales. ...