Debt financing is about borrowing funds and making interest-based repayments. This type of financing is among the two main business-funding options, together with equity finance. It’s considered the most common type of business financing for growing businesses. Let’s reveal more about this type of business funding and see how Best Payment Providers can help you with obtaining the right type of financing.
What Debt Financing Is
Think of debt financing as securing funds from a third party and making charge- and interest-based repayments. Such funding is also known as financial leverage.
In this case, you aren’t obliged to lose any equity related to your business so to get the capital. Debt financing differs from equity financing in that the latter implies issuing stock to get money. Debt financing has to do with selling a company’s fixed income products, including bonds, bills, or notes.
Debt financing features the following types:
- Non-bank cash flow funds
- Recurring revenue funds
- Loans from financial institutions
- Loans from family/friends
- Peer-to-peer lending
- Home equity loans and lines of credit
- Credit cards
If Debt Financing Is for You or Not
This is a fine opportunity to obtain funds for your business that enables …