Financial risks and countermeasures of debt financing

Debt financing means that financing by debt is an important source of business. Debt financing must pay certain price. Both long-term loan and issuing bonds have to pay costs of borrowing according to the stipulation interest rate. Debt financing is the inevitable choice for the enterprise to collect funds under the market economy condition. The global economy is developing rapidly and more and more enterprises begin large-scale development service, which needs the fixed capital source. Therefore, enterprises have to rely on debt financing. This article has enumerated the financial risks of debt financing, and analyzes the determination of best capital structure, finally, in view of the problems, puts forward the corresponding proposals and the countermeasures.