Debt financing is an enterprise for obtaining the necessary funds through external borrowing of funds obtained. Debt financing, including commercial bank loans and the issuance of corporate bonds , convertible bonds . Debt financing relative to equity financing, the debt financing will not dilute equity , not a threat to the controlling shareholder of control , debt financing also has financial leverage benefits, but with servicing debt financing rigid constraints, with high financial risk , risk control bad will directly affect the survival. In debt financing, the commercial bank loan is our business acquisitions acquires the funds major way, mainly because of China's financial markets developed, other financing channels are sluggish or financing costs are too high, in addition, M & A activity also tend to be the government . " Boot "under market behavior , to solve SOE property rights issues, it is easier to get state-owned commercial banks in lending .

Equity financing through equity financing is an enterprise absorbing direct investment , issue of ordinary shares , preference shares and other ways to obtain the funds. Equity financing with funds available for long-term use, the pressure of debt does not exist, but easy to dilute equity financing options, threatening controlling shareholder rights, but also with after-tax income to pay investors profits , financing costs higher. Corporate finance is the business capital of the starting point of the movement, but also the corporate earnings in the foundation upon which to follow.