 Britain financed its war expenditures by issuing a combination of unfunded and funded debt.Unfunded debt, short-term obligations not funded by interest payments on the part of the borrower, included army, ordinance, navy, and exchequer bills and was more costly for the treasury to repay than longer-term debt.Funded debt, long-term obligations funded through interest payments made by the borrower over the term of the loan, was primarily used to retire more costly, short-term debt.