The process of raising funds by issuing unsecured low-grade, high-yield securities (junk notes, junk bonds, etc.). This is usual at times of takeover in which the acquirer chooses to issue unsecured debt to finance a prospective transaction due to its lacking of enough cash to pay the acquisition price. Junk financing is only affordable by large companies due to the sizable cash flow required to pay the high interest rates associated with it.

Junk financing is also known as high-yield financing.