debt-financing

Vocabulary Word

Definition

'Debt financing' is like taking out a loan. You borrow money from someone, usually a bank, and you promise to pay it back with extra money, called interest.

Examples in Different Contexts

In business expansion, 'debt-financing' is used to fund growth without giving up ownership equity. A business owner might say, 'We chose debt-financing for our expansion to retain full control of our company while accessing the capital we needed.'

Practice Scenarios

Startup

Scenario:

The startup landscape is becoming competitive and we need to speed up operations. Should we look at investor funding?

Response:

While investor funding is helpful, maintaining full control is essential for us. I think we should opt for debt financing.

Business

Scenario:

Our company needs funding for the new branch. Do we consider raising funds through equity?

Response:

Equity financing could dilute our ownership. Let's explore debt financing for the new venture.