Debt

Debt is a way to finance your business where:

You receive funding and pay that back with interest over time.- either over a fixed period or variable period.
The funding could be revolving debt - where it is constantly repaid and then re-borrowed
You could get interest-only repayment periods, (capital repayment holidays), where for a fixed period you only pay back the interest. These may be followed by periodic repayments of capital and interest, or a one-off full capital repayment at the end of the agreed term.

Bank Loan

Bank Overdraft

Government backed Start-Up Loan

Second and third tier loans - usually higher interest rates where the banks won’t lend

Invoice Finance – Factoring / Confidential Invoice Financing

Asset Finance - deposit paid and then the balance paid over a specified period.

Crowd-funding debt

Hire Purchase

Leasing

Trade Finance

Tier 1 Entrepreneur Funding

If secured against company assets (via a debenture) you may not have to give personal guarantees on that finance.

The legal costs of acquiring the finance may be less than that raised via equity

The interest rate may make the purpose for which the debt was borrowed un-profitable

If you are an early stage business, you may not have the track-record to support the repayment schedule.