The harsh reality of borrowing money is that at some point you need to pay it back. Learn how to include debt reduction in your cash flow, and build interest payments into your budget.
- So you've gone and borrowed money for your business.…After all the hoops of paperwork and approvals…you have to jump through, you may think that…the hard work is done.…The money is in the bank, right?…Think again.…Paying back money is much harder, sorry.…As humans we tend to overestimate…positive outcomes and underestimate the negative ones,…and once your business owes money…it's important to be realistic…about how you're going to service that debt.…Step one is to setup a direct deposit…for the time when repayments fall due.…
You can always change it manually…but it's important to have the repayments…factored into your monthly expenses.…Also, having a separate line item…on your cash flow statement helps you see instantly…how your debt repayments fit into the big picture…of your company's financials.…Step two is to keep close track of your interest rates.…A late repayment may send the cost…of your debt skyrocketing.…Make sure that you're keeping an eye…on your repayment schedule, and that you're paying down…the principal as fast as you can.…
Released
1/23/2018- Explain the advantages and disadvantages of different business and corporate structures.
- Determine cash flow using the concepts of revenue and expenses.
- Demonstrate knowledge of best practice fundamentals for business.
- Explain the importance of a cash reserve.
- Differentiate between the types of insurance and other protections a business should have.
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Video: Service your debts