What is debt financing?
Debt financing is a way for businesses to get the capital that they need to open or to operate an existing business. Debt financing is when a person, business, bank or other entity provides capital to a business and the business has the obligation to pay back the principal on that loan plus an agreed upon rate of interest. Many businesses find that debt financing is advantageous because it provides needed capital while allowing the existing owners to maintain ownership and control of the business. Businesses who engage in debt financing may also be eligible for significant tax deductions. However, businesses need to be able to repay their loans according to the agreed upon repayment schedule in order to avoid negative consequences.
Speak to an Experienced Business Law Attorney Today
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified business lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact an attorney in your area from our directory to discuss your specific legal situation.
Additional Business Law Articles
- Anti-Spam Laws
- Business Law
- Business Law Overview
- How to Name Your Business
- The Legal Steps to Starting a Business
- An Overview of the Uniform Commercial Code
- What is the Retail Installment Sales Financing Act?
- Breach of Fiduciary Duty
- What are Negotiable Instruments?
- What is equity financing?
- How to Avoid Big Mistakes in Your New Business
- What Should Be Included in an Employee Handbook?
- Do I Need to Charge Sales Tax for My Online Business?
- Letters of Intent and Term Sheets
- Shareholder Agreements
- An Ounce of Prevention – How Businesses Can Minimize the Threat of Litigation
- Buy Sell Agreements
- Running a Business: Legal FAQ
- What is Your Business Worth?
- How to Deal with Common Disputes of Family Owned Businesses
- Business Slowdowns, Downsizing, and Cost Reductions
- Due Diligence in Business Mergers and Acquisitions
- How Can a Business Law Attorney Help You Dissolve Your Business?
- The Importance of Business Law Attorneys
- Being Squeezed out of a Family Owned Business?
- What are the advantages of organizing a business as a Sole Proprietorship?
- What are the advantages of a limited liability partnership (LLP)?
- The Sarbanes Oxley Act: Success or Failure?
- Common Small Business Tax Deductions
- The Board of Directors Duties of Care and Loyalty
- Common Contract Terms Explained
- Business Finance Laws
- Advertising Your Business on the Internet
- Are There Any Limits on Executive Compensation?
- Employer Identification Numbers
- How to Finance Your New Business
- Corporations and the Law
