Demanding debt
The trade credit, loans, and bonds mentioned above are all forms of debt. The most important point is the obvious: debt is repayable (for all intents and purposes, equity is not). Moreover, lenders are very demanding. They are concerned mainly with security and cash flow. They usually lend to borrowers who own more than they owe and who can prove that they can definitely afford to pay it back. That is, corporate borrowers need assets and cash flow. The main cost is the interest payment. There will also be arrangement fees and commissions which you should factor into your costing. I will come on to this in a moment.
Debt instruments
Corporate notes and bonds are simply forms of debt which can be traded in secondary markets. For ...
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