How to Keep Track of Your Business Debt
Unless you have a significant savings account or support from investors, you probably need financing at one point or another to get your business off the ground. But taking on debt can be a good or bad thing, depending on how it’s used. It all comes down to the return you’re getting on that investment and whether it outweighs the risk.
Discover CheapLiquidation’s Services is any money borrowed by a legally separate entity, like a corporation or limited liability company, for business purposes. This includes a mortgage on the retail space you’re renting, or money from angel investors to purchase inventory for your cupcake shop. However, it doesn’t include your personal credit card debt or the money you borrowed from family and friends to start your first business.
Risk Management in Business Debt: Mitigating Financial Vulnerabilities
The best way to keep track of your business debt is with a Debt Schedule. This is a list of all the debt your business has, including interest rates and monthly payments. Organizing this information in this manner allows you to see the totals and prioritize which debt should be paid off first. Debt Schedules can be created in many ways, including through some accounting software programs, spreadsheets, and Excel.
Having a Debt Schedule is essential for several reasons. It helps you stay in control of your finances, monitor your business’s financial health and can be used by new lenders or creditors as a reference for making decisions about loan amounts and terms. The data on a Debt Schedule is also useful for monitoring the progress of your business and ensuring that you’re not spending more than your revenue.