Funded debt is debt that a company or other entity holds with a maturity of more than one year or business cycle. Generally, it refers to interest-bearing debt instruments of fixed maturities or loans of extended terms and is therefore also referred to as long-term debt. Funded debt is assumed to be long-term debt as short-term debt has more immediate liquidity needs.

Funded debt differs from non-funded debt, which comes from accounts receivable, convertible debt and other non-interest bearing obligations which can have shorter tenors. Funded debt consists of bonds with maturity dates of one year or more, convertible bonds, long-term notes issued for the purpose of financing operations and debentures. It is usually supported by collateral or other assets used as loan security and taken out by the company to finance its long-term activities.

Funded debt gives companies access to money for extended time periods, providing them with the ability to finance operations that would otherwise be impossible due to their lack of short-term cash. Depending on the financial needs of the company and the interest rate environment, loans of various durations can be taken.

One advantage of funded debt is that companies can obtain the funds they need without giving up a share of their ownership or control. Companies can also often obtain lower interest rates than they would through non-debt financing sources, making funded debt attractive. Another advantage is that issuing debt can be much faster and simpler than equity financing and doesn't come with the voting or ownership rights that come along with equity investments.

Of course, as with any form of financing, there are also risks to consider. Companies may have difficulty refinancing the debt when it comes time to pay it off, for example, and potential fluctuations in interest rates over time can also have an impact. Similarly, companies may find themselves unable to secure enough money to cover a debt burden, resulting in default or some other type of financial trouble.

As such, companies need to approach any funded debt cautiously, making sure to weigh the risks against the potential rewards before entering into any long-term debt. With careful planning and due diligence, however, financed debt can be a great way for companies to secure the money they need in order to pursue their long-term goals.