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Simple English definitions for legal terms
debt capital
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A quick definition of debt capital:
Debt capital is money that a company borrows by selling bonds. This is different from equity capital, which is money that the company's owners invest in exchange for ownership. Debt capital has to be paid back with interest, while equity capital does not. Companies use debt capital to fund projects or operations when they don't want to give up ownership or control of the company.A more thorough explanation:
Debt capital refers to funds that a company raises by issuing bonds. Bonds are like loans that investors give to the company, and the company promises to pay back the money with interest over time. This is different from equity capital, which is money provided by a company's owners in exchange for evidence of ownership, such as stock.
For example, if a company needs to raise money to build a new factory, it might issue bonds to investors. The investors give the company money, and in return, the company promises to pay them back with interest over a certain period of time. This is a way for the company to raise money without giving up ownership or control.