Borrowed capital, debt capital, bonded capital, outside capital, debts

The capital of a company financed by borrowing of any kind. It includes all items on the liabilities side of the balance sheet that represent claims on the company. This also includes provisions that have to be made for foreseeable payments to be made at a later date, such as taxes or employee pensions. – It should always be noted that the cost of debt depends on the debt-to-equity ratio of a company. Therefore, the proportion of debt capital is also reflected in the rating of a company and thus has an influence on the financing costs. – Furthermore, the tax treatment of equity financing and debt financing must be taken into account. In principle, however, extensive borrowing increases the risk of liquidity bottlenecks and repayment difficulties. – See equity capital, financial strength, borrowed funds, total cost of capital, taxation of profits, leverage, capital commitment period, leverage, mezzanine capital, subordinated loans, ranking theory, backing, interest. – Cf. BaFin Annual Report 2006, p. 56 f. (IASB distinction between equity and debt; problem of puttable financial instruments under IAS 32), ECB Monthly Bulletin of April 2010, p. 65 f. (Deleveraging at banks since 2005; overviews), Deutsche Bundesbank Monthly Report of January 2012, p. 15 (Influencing variables on debt financing).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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