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Someone to whom a company has a debt is known as an investor

Someone to whom a company has a debt is known as an investor

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Answer #1

Debt Financing - Debt financing is when a firm raises money for working capital or capital expenditures by selling debt instruments to individuals and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise that the principal and interest on the debt will be repaid.

The individuals or institutions who become creditors as per mentioned above are knows as the investors.

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