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Definition: When a company borrows money to be paid back at a future date with interest it is known as debt financing. ... Debt financing is a time-bound activity where the borrower needs to repay the loan along with interest at the end of the

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Debt financing occurs when a company raises money by selling debt instruments to investors. Debt financing is the opposite of equity financing, which entails issuing stock to raise money. Debt financing occurs when a firm sells fixed income products, such as bonds, bills, or notes.

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