What is Debt Capital?
Debt capital is the capital, usually money, raised through issuing bonds. Although most of the time the capital raised is money, it could be other goods of value as well. The capital raised must be paid back to those who finance the debt. Both private companies and governments can raise debt capital this way. To raise capital, companies have a number of different options. Of course, the purpose of most companies is to sell a product or service for a profit. However, some may need or wish to raise money faster than the normal course of buying and selling will provide. To do that, they may consider debt capital. In some ways, debt capital may be more attractive to a company than another form of raising money, such as an additional stock issue. Companies may not want to issue more stock because that would dilute the ownership of the existing stock. Issuing more stock runs the risk of lowering the stock price as well, depending on how much is issued. Investors may also find that supplying
