Debt capital is

• A. The owners' residual claim on assets after debts are paid
• B. Is any borrowed or loaned capital invested in the business that must be repaid to creditors
• C. The total equity minus liabilities
• D. Any revenue generated by the business in a year

Answer: (B)

Debt capital is funds borrowed to finance the business that must be repaid to lenders, usually with interest, and shown as liabilities on the balance sheet. This form of financing lets owners keep control while leveraging external funds, but it creates an obligation and affects leverage and cash flow. The description that matches this is: any borrowed or loaned capital invested in the business that must be repaid to creditors. The other statements describe ownership (equity), an incorrect mix of equity and liabilities, or revenue—and none capture the idea of funds borrowed that must be repaid.