Definition
Debt financing is the raising capital by borrowing money that must be repaid over time. Founders reach for it when a vague conversation needs a shared, specific meaning. Name it clearly, then let the next decision — a hire, a price, a test, or a pass — follow from that meaning.
In the room
How the word shows up in a real conversation.
Two cofounders disagree until they define Debt financing. Once they agree it means “Raising capital by borrowing money that must be repaid over time”, the argument becomes a decision.
Common mistake
Using Debt financing as a label instead of a fact. If you cannot point to the evidence — a number, a customer, or a written assumption — you are using the word as jargon.
See also
Debt
Money borrowed by a company or individual that must be repaid with interest.
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Debt service
Regular payments required to cover interest and principal on outstanding debt.
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Debt-equity ratio
Financial ratio comparing a company's total debt to its shareholders' equity.
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Debt-service coverage ratio
Measure of a company's ability to pay its debt obligations from operating income.
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