About Debt Financing

Debt financing is a central financing resource and the classic supplement to equity financing in Germany. It is available for day-to-day business (working capital loans), can help bridge temporary financial gaps (bridge loans) or finance long-term investments (investment loans).

The main differences in comparison to equity financing are:

• Time limit
• Payment of interests and amortization unlinked to the earnings trend
• No transfer of shares to the creditor
• No liability of the creditor
• Preferred repayment in case of insolvency

Debt is mainly provided by banks. In Germany, universal banks offer the whole range of financial services. In addition, there are also special banks focusing on specific products or clientele.