Types of Debt Finance

Types of Debt Finance

The following are important debt finance available to the organization,

1. Preference Shares
2. Debentures
3. Bonds
4. Bank Loans
5. Finance Lease
6. Sale and Lease Back
7. Trade Credit
8. Bank Overdraft
9. Mortgaged Loan

The above mentioned debt finance can be classified as under

1. Long Term Debt Finance
2. Medium Term Debt Finance
3. Short Term Debt Finance

Long term debt finance typically means the finance for more than five years . This finance include preference share, Debentures, Bonds
Medium term Finance typically means the finance between three to five years. This finance include finance lease, Sale and leaseback,.
Short Term Finance typically mean finance for up to one year and includes bank overdraft, trade credit.