In business administration, Debt Financing is understandable to be measured in the context of corporate finance, in which you provide debt capital to a company or another legal person for a limited period.
Contrasting with this is self-financing, in which equity is made available to the company. Debt instruments are funds from creditors.
Interest and repayments for debt financing are at the expense of liquidity. At the same time, there are specific advantages associated with debt financing
Depending on the term, a distinction made between short-term and long-term types of debt financing.
For short-term loan financing includes loans with a maturity of up to one year. Examples include short-term bank loans, supplier credit, customer loans(advances), and public debt as tax liabilities.
Examples of long-term credit financing are bank loans, bonds, and promissory note loans. Another category is credit substitutes. It includes leasing, factoring, franchising, and Forfaiting
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