Almost every small business borrows money. The most common reason is to purchase a fixed asset of some sort. The amount borrowed is most often a long-term liability. There are several steps involved in recording the original loan and then processing the respective payments.
The amount paid for the use of capital as borrowed funds is called interest. This is very similar to rent. With rent, the capital is the fixed asset and the rent is the amount of interest paid to use the fixed asset during the time period.