What is an example of debt financing for a corporation?

Debt financing involves raising capital through borrowing, where a corporation takes on debt that it must repay over time, typically with interest. A shareholder loan is a prime example of this because it involves a loan made by a shareholder to the corporation. In this arrangement, the corporation borrows funds from its shareholder, which it agrees to repay under agreed-upon terms. This increases the corporation's debt obligations and is a clear demonstration of debt financing.

In contrast, share sales, venture capital investments, and public offerings are classified as equity financing. These methods involve raising capital by selling ownership stakes in the company, such as shares or equity interests, rather than incurring debt that must be repaid. Therefore, while they are important methods of financing for corporations, they do not qualify as debt financing in the same way that a shareholder loan does.