What is debt financing?
Debt financing is when a company borrows money to fund its operations or projects, which it must repay with interest.
What are the advantages of using debt financing?
Advantages include retaining ownership, potential tax benefits, and the ability to leverage funds for growth.
Are there any risks associated with debt financing?
Yes, risks include the obligation to repay regardless of business performance and potential impacts on credit ratings.
How does debt financing differ from equity financing?
Debt financing involves borrowing money, while equity financing involves raising capital by selling shares of the company.
Can you give examples of debt financing?
Examples include bank loans, bonds, and lines of credit.
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