Question

Explain the following term/concept.

Borrowed Capital 

Answer 1

This is the capital borrowed from creditors. It’s also known as debt capital. Debt holders are the company’s creditors, and they receive interest on their investment. Interest is paid at a fixed rate and is collected through the issuance of debentures, fixed deposits, loans from banks or financial organizations, and so on. Creditors do not have voting rights at general meetings.