Long Term Notes

Similar in nature to the short term notes, these notes have higher face values, typically in excess of $50,000 and require an extended application process to be approved by a committee within the bank. The payback periods range from five years to upwards of twenty years. The most common use of this type of a note is to purchase big ticket items or extend or upgrade the facilities where the business is located. The key is that the note’s lifetime is slightly shorter than the life expectancy of the associated asset.

Financial Statements for the Small Business

Financial statements serve the purpose of presenting economic activity and status related to a particular date and over a particular time frame.  Accountants record monetary transactions and via financial reports present the information in an easy to understand format.  The financial statements for a small business do not have to comply with those of publically …

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Long Term Debt – Financial Statement Presentation

Long Term Debt is one of the multiple forms of capitalizing a business.  It includes bonds, secured notes and mortgage notes.  In the world of small business, the most common form of long term debt is secured notes, most likely with recourse.  As an owner of a business you need to understand how this information …

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Insolvency and Bankruptcy – Know the Difference

Every business owner needs to know the difference between insolvency and bankruptcy.  Often these two terms are misunderstood and improperly used in conversation.  You need to know their correct meaning because both are used in civil law and both have different issues to address during the process.  In addition, understanding these two terms builds a …

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Current Liabilities Section of the Balance Sheet

The current liabilities section of the balance sheet identifies those amounts due to third parties within the current year.  These include accounts payable, credit card accounts, accrued payroll, taxes, unearned revenue, deposits and those amounts due within one year related to debt instruments.  In general they are listed from the most immediate amounts due to …

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