Final answer:
A company primarily financed by creditors instead of investors relies more on borrowing money from banks or issuing bonds. This is common for small companies that may not have the resources to attract investors. By borrowing or issuing bonds, the company maintains control but commits to interest payments.
Step-by-step explanation:
When a company is primarily financed by creditors as opposed to investors, it means that the company relies more on borrowing money from banks or issuing bonds rather than selling stocks to the public. This type of financing is more common for small companies that may not have the resources or reputation to attract investors.
By borrowing money or issuing bonds, the company is obligated to make interest payments, but it maintains control of its operations and is not subject to shareholders.