Debt Financing

A method of raising capital through borrowing. Although commonly associated with lending from a bank, debt financing includes selling debt instruments to individual and institutional investors, often seen in practice by corporations through the use of bonds. The cost of debt is the price of interest payments to either the lender or bondholder.

Debt financing differs from equity financing in that the borrower is not giving up ownership in exchange for capital. Instead, the lender is promised timely principal and interest payments, while often guaranteed first repayment before any other equity holder. Lenders are said to be at the top of the capital stack, and have the highest claim to any liquidated assets.


Another Way To Own Investment Properties

Download our guide to real estate investing Seek an Upgraded Real Estate Portfolio
Download eBook


Download our guide to real estate investing

Another Way To Own Investment Properties

Learn new ways to use real estate to pursue your wealth goals.

By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received.