Rebel Cole, Professor of Finance in the Driehaus College of Business at Chicago’s DePaul University, explains why companies acquire debt.
He details the reasons why a business uses debt to finance a portion of its investments and explains how this is beneficial to the firm. His booklet explains the differences between debt and equity, explores the pros and cons of using debt versus equity to finance a company’s investments, and examines the prevalence of debt use by businesses, both public and privately held. It explores the implications for firms, the economy and for situations when a business needs, but cannot obtain, credit.
Four out of five small businesses use debt to finance at least some portion of the firm’s investments.
Download the booklet here.