What is considered non-owner financing?

Non-owner financing refers to funds that a business obtains from sources other than its owners. This can include loans, lines of credit, and any form of debt where creditors provide resources with the expectation of repayment, usually along with interest.

When considering the choices provided, the correct answer highlights the financing that comes from creditors, which is a key aspect of business funding through liabilities. This distinction is important as it underscores the concept of leveraging external resources to enhance financial growth or manage operational costs without diluting ownership through equity.

The other options, such as equity contributions from owners, profit that is reinvested into the business, and personal funds of the owners, represent forms of financing that come directly from the ownership side. These contributions either increase the owner's stake in the business or do not involve a repayment obligation, contrasting sharply with the nature of creditor financing, which demands compensation.

Understanding these different forms of financing is crucial for assessing a company's capital structure and determining how it is funded, making non-owner financing vital in discussions of financial strategy and stability.