Money that you borrow from another source, with the understanding that you will pay it back within an agreed period. In other words – a loan. This can be short-term (a year or less) or longer term. Debt Financing is not to be confused with Equity Financing, in which a company is granted a loan in return for a share of the business. This normally occurs with an Angel Investor or Venture Capitalist, or may be a result of issuing shares in a public offering.