What is meant by corporate debt?

Corporate debt refers specifically to the debt instruments that corporations issue to raise capital for various business needs. This often involves obtaining long-term financing, which can be used for purposes such as expanding operations, investing in new projects, or refinishing existing assets. When corporations issue bonds or notes, they are effectively borrowing funds from investors with the promise to repay the principal amount along with interest at a specified future date. This type of financing is crucial for enabling corporations to grow and manage their operations effectively without immediately impacting their equity structure.

In contrast, short-term financing typically revolves around working capital needs and is not what is commonly referred to as corporate debt. Personal loans are unrelated to corporate finance, and convertible debt, while relevant to corporate financing, specifically allows for conversion into equity—making it distinct from general corporate debt that is strictly focused on borrowing funds for capital needs without any immediate equity implications.