long-term financing

Also known as: long-term capital, long-term security

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June 30, 2026

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Long-term financing involves raising capital for a company through debt or equity for periods exceeding 15 years. This can be achieved by selling bonds, which are promissory notes obligating the firm to pay interest. Alternatively, companies can issue stock, representing ownership. The choice between debt and equity, known as the capital structure, aims to minimize the cost of raising capital. While leverage from debt can increase returns, it also raises financial risk. Long-term debt includes mortgage bonds secured by assets and debentures backed by credit standing. Companies may also use preferred stock, which offers advantages similar to bonds without maturity dates or fixed charges.1

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international payment and exchange
Long-term flows
Long-term capital movement divides into direct investments (in plant and equipment) and portfolio investments (in securities). In the 19th century direct investment in plant and equipment was preponderant. The United Kingdom was by far the most important contributor to direct investment overseas. In…
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Long-term capital movement divides into direct investments (in plant and equipment) and portfolio investments (in securities). In the 19th century direct investment in plant and equipment was preponderant. The United Kingdom was by far the most important contributor to direct investment overseas. In…
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business finance
Long-term financial operations
Long-term capital may be raised either through borrowing or by the issuance of stock. Long-term borrowing is done by selling bonds, which are promissory notes that obligate the firm to pay interest at specific times. Secured bondholders have prior claim on…
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Long-term capital may be raised either through borrowing or by the issuance of stock. Long-term borrowing is done by selling bonds, which are promissory notes that obligate the firm to pay interest at specific times. Secured bondholders have prior claim on…
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Export-Import Bank of the United States
…bank’s principal programs include direct long-term loans, credit and working capital guarantees (principally to commercial banks), short-term and medium-term loans, credit insurance, financing for the purchase of aircraft, and financing for environmental, nuclear, and other special projects. Most bank assistance has consisted of direct financing to buyers abroad of American…
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…bank’s principal programs include direct long-term loans, credit and working capital guarantees (principally to commercial banks), short-term and medium-term loans, credit insurance, financing for the purchase of aircraft, and financing for environmental, nuclear, and other special projects. Most bank assistance has consisted of direct financing to buyers abroad of American…
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open-market operation
…dealing in both short-term and long-term securities would distort the interest-rate structure and therefore the allocation of credit. Opponents believe that this would be entirely appropriate because the interest rates on long-term securities have more direct influence on long-run investment activity, which is responsible for fluctuations in employment and income.…
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…dealing in both short-term and long-term securities would distort the interest-rate structure and therefore the allocation of credit. Opponents believe that this would be entirely appropriate because the interest rates on long-term securities have more direct influence on long-run investment activity, which is responsible for fluctuations in employment and income.…
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