Debt is an obligation that requires one party, the debtor, to pay money, goods, or services to another party, the creditor. Most commonly, debt arises when a person or organization borrows money intending to repay it in the future under specified terms. These terms generally involve a repayment schedule and may include interest payments. Examples of debt include loans, bonds, and credit card balances.

For businesses, managing debt is a critical aspect of financial operations. Debt can be used as a tool to finance growth or capital projects, but it needs to be carefully controlled to avoid excessive financial strain. For example, a company might take on debt in the form of a bank loan to purchase new machinery, expecting that the productivity gains will offset the cost of repaying the loan.