Debt is capital that a company borrows and generally must repay. The borrower typically makes periodic interest payments, then returns the principal, or original amount borrowed, at maturity. Common forms include bank loans, revolving credit facilities, and bonds.
Debt holders are creditors, not owners. They usually do not participate directly in the company’s upside when its value increases. Instead, they expect the contractual interest and principal payments promised by the borrower. If the company cannot meet those obligations, it may default, allowing lenders to pursue remedies specified in the debt documents.