Borrowed capital refers to funds obtained by a firm through loans or other forms of debt to finance its operations or investments. Compared to equity financing, borrowed capital involves a fixed cost in terms of interest payments.
Leverage refers to the use of various financial instruments or borrowed capital—such as margin—to increase the potential return of an investment.
Loan capital refers to the funds borrowed by an organization to finance its operations, subject to the payment of interest over the life of the loan, which is repaid at the end of the loan term.
