debt financing

Debt Financing

The act of a business raising operating capital or other capital by borrowing. Most often, this refers to the issuance of a bond, debenture, or other debt security. In exchange for lending the money, bond holders and others become creditors of the business and are entitled to the payment of interest and to have their loan redeemed at the end of a given period. Debt financing can be long-term or short-term. Long-term debt financing usually involves a business' need to buy the basic necessities for its business, such as facilities and major assets, while short-term debt financing includes debt securities with shorter redemption periods and is used to provide day-to-day necessities such as inventory and/or payroll. See also: Equity financing.

debt financing

The acquisition of funds by borrowing. For example, a business may use debt financing to raise funds for constructing a new factory. Corporations find debt financing attractive because the interest paid on borrowed funds is a tax-deductible expense. Compare equity financing.

debt financing

the financing of firms’ and governments’ deficits by the issue of FINANCIAL SECURITIES such as short- dated company BILLS OF EXCHANGE and government TREASURY BILLS, and, in the case of government, longer-term BONDS. See PUBLIC SECTOR BORROWING REQUIREMENT.
References in periodicals archive ?
Alderon and BNP Paribas ( BNP ) have mutually agreed to terminate the engagement of BNP Paribas as lead arranger of the senior debt financing facility for the construction of the Kami Project.
Rezwan Mirza, Managing Director, Head of Corporate Coverage, UAE and GCC, said, "This expansion has been realised in response to the increasing demand for debt financing in the region, with the backdrop of economic recovery and regional government expenditure on infrastructure and industry.
Our experience with self-storage assets, as well as overall expertise in arranging equity, mezzanine and debt financing for these facilities allows us to bring a well-rounded service to the landscape of self-storage financing," Fried points out.
The downtown sports arena project and judgment bonds to pay a settlement in the General Motors business-tax lawsuit will increase nonvoter-approved debt and could severely hamper Mayor Richard Riordan's ability to use debt financing in his next budget.
For debt financing, small businesses are generally dependent on financial institutions, primarily commercial banking firms.
The latter occurs with increasing frequency when the economy is sluggish, forcing many entrepreneurs to investigate debt financing.
This transaction with Comverge is GE Energy Financial Services' first corporate debt financing for a growing solutions provider in the strategically important demand response electricity management sector," said Tony Shizari, Managing Director and leader of the debt finance group at GE Energy Financial Services.
Completing the trio, London Head of Debt Finance David Miles and a team including Smridhi Gulati and associate Julia Garrett acted for the UBS Special Situations and Emerging Markets Lending team on its provision of a 65 million debt facility for Globalworth Real Estate Investments Ltd, the arrangement of this facility being consistent with the company's plans to use debt financing to improve returns on investments.
today announced that it has obtained a highly confident letter from Jefferies LLC to arrange for debt financing to fund a $20 per share dividend paid to all shareholders of Cracker Barrel Old Country Store, Inc.
Longview, which structures and secures debt and equity financing for middle-market developers, structured, negotiated and placed the acquisition, construction and mezzanine debt financing, as well as the outside equity, for the $32 million project, according to Mitch Draizin, Longview president.
Council members Rita Walters, Jackie Goldberg and Mike Hernandez raised concern about depending so much on debt financing, but voted with the rest of the council to approve the new bond issue after Comrie said the city's reserve fund is down to $18 million and can't cover the court judgment.