Small business owners know that analyzing cash flow is a fundamental part of managing a company. One tool for this crucial task is a business debt schedule, also known as a schedule of liabilities.
So what is a debt schedule? It’s a document — typically in the form of a spreadsheet — that contains details on all the business’s loans, their interest rates, payment amount and frequency, and additional details as needed. Information shown on the debt schedule includes entries on the income statement, balance sheet, and cash flow statement.
If you’re thinking about setting up a debt schedule (or upgrading one you already have), you’ll want to make the document clear and comprehensive. Read on for specifics.
Key Points
• Business debt schedules contain comprehensive details about loans, interest rates, payment amounts, and maturity dates, usually in a spreadsheet format.
• Maintaining an accurate debt schedule enables borrowers to strategize around loan repayment and additional borrowing if needed.
• Comprehensive schedules include creditor names, original loan principal amounts, current balances, payment terms, maturity dates, collateral pledged to secure the debt, and additional columns as warranted.
• Creating a debt schedule involves gathering loan documentation, listing the basic details of all debts, and organizing the information using templates or accounting software.
• It’s important to update monthly after loan payments are received to ensure accuracy and track financial obligations effectively.
Why a Business Debt Schedule Matters
As your business grows, taking on more challenges and more risk and maintaining a current, complete debt schedule can provide valuable context for strategic decisions. Some of the moves you might make could involve:
• Cash flow management: A debt schedule helps businesses plan for all monthly outflows, ensuring they have sufficient revenue to cover debt service without disrupting operations. It’s prudent to include business credit card debt, too, as those payment amounts could vary widely, affecting cash flow projections.
• Strategic repayment: By viewing all loans’ interest rates side-by-side, owners can identify the debts with the highest annual percentage rates (APRs) and prioritize paying those down.
• Informed borrowing: The information allows owners to calculate their debt service coverage ratio (DSCR), which helps them determine whether the company can safely afford additional small business loans.
• Meeting lender and investor requirements: Most lenders require a formal debt schedule during loan applications to assess a company’s creditworthiness and existing debt burden. This could be particularly useful when pursuing startup business loans, as the company may not have a long credit history to share with lenders.
• Refinancing opportunities: Seeing all the loans’ terms and rates at once can help owners pinpoint suitable times for business debt consolidation or refinancing.
What to Include in a Debt Schedule
A comprehensive debt schedule commonly features all business liabilities.
This may include Small Business Administration (SBA) loans, mortgages, equipment leases, business lines of credit, or bonds. Here’s what a debt schedule often includes:
• Creditor details: The name of the bank, lender, or investor
• Loan specifics: Original loan amount, date of origination, and current balance
• Payment terms: Interest rate, monthly (or periodic) payment amount, and payment status (current or delinquent)
• Maturity information: The final date by which the debt must be fully repaid
• Collateral: Any assets pledged as security for the loan
Short-term operational expenses — such as payroll, taxes, and accounts payable — are generally left out of the debt schedule. That’s because these expenses are day-to-day costs, not debts your business has incurred to finance long-term assets or projects.
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How to Create a Business Debt Schedule
If you have kept all your loan paperwork and contracts on file, creating a business debt schedule is likely straightforward. Here are the six steps for putting this document together.
Step 1: Gather Loan Documents and Statements
For each current loan, you should be able to request paperwork — such as closing documents, loan agreements, and collateral documentation — from a bank or other lender representative. You may be able to retrieve up to seven years’ worth of loan documents and account statements from your online banking portal.
If you have SBA disaster loans, Covid-19 economic injury disaster loans, 504 loans, or 7(a) loans, you should be able to view loan documents, payment history, and monitor status at the MySBA loan portal.
For additional debt-related information, check in with your business accountant or CPA. They should have copies of the business’s loan schedules; documentation of all lines of credit, lease agreements, and bond terms; tax arrears; and inventories of assets used as collateral.
Step 2: List Each Debt Account and Balance
You can start off your debt schedule by simply making a bare-bones list of all of your company’s existing debts and the lender, origination date, and current balance for each. It may be helpful for future reference to include the loan officers’ names and contact information.
Step 3: Add Rates, Payment Amounts, and Due Dates
Fill in the amount of each payment you make and the date when it’s due. Most payments are monthly, but some may be quarterly, semi-annual, or annual.
When you’re inputting the rates into your spreadsheet, be sure to use the annual percentage rate (APR) you’re paying on each loan. That number accounts for not only the interest but also any additional lender fees. As a result, it gives you a more accurate reading of the loan’s cost.
Step 4: Map Principal vs Interest Over Time
It can be helpful to add columns that show how each loan payment is distributed between principal and interest charges. This distribution will change over time due to loan amortization, which increases the share of each payment that’s allocated to principal and decreases the interest amount.
A lender will typically provide a copy of your loan’s amortization schedule during the closing process. Alternatively, many online calculators will generate a version for you based on the principal, interest rate, and term of your loan.
If you were considering additional loans or refinancing the ones you have, you (and the lender) will want to know exactly how much principal you already owe.
Step 5: Note Variable-Rate Triggers and Maturity Dates
Most business loans have a fixed interest rate and a specific maturity date. Include these figures in your debt schedule. Both can help provide a consistent foundation for planning and projections.
However, some loans (e.g., variable-rate, fixed-payment mortgages in Canada) have variable interest rates. With these loans, if the prime rate rises significantly but your payment amount doesn’t change, you may hit a “trigger point” at which your payments may only be covering interest. Lenders are likely to change the amount of your monthly payment to compensate. If you have one of these loans, you should be able to find trigger rate information in your loan contract.
Step 6: Review for Accuracy and Update Regularly
As with all of your business records and documents, keeping a debt schedule up to date and accurate is key. A debt schedule loses value if it’s outdated. Careful recordkeeping could alert you to possible future cash crunches or scheduling issues.
Having all of this information properly maintained could also be helpful at other times. Examples might include tax filing time or during a bid for investors or lenders — situations where you’d want debt summaries to be readily available.
When submitting a debt schedule to a lender for consideration, you typically have to sign it to certify the accuracy of the debt.
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Business Debt Schedule Template
You can find a variety of free templates for business debt schedules online. Some free templates are offered by federal, state, or county government sources. For instance, the SBA has a blank schedule of liabilities you can use for this purpose. Or, you may be able to create a debt schedule with your accounting software by tapping into the financial data that’s already organized in your database.
Choose a debt schedule template that accommodates your business’s specific financial circumstances while also remaining clear and easily understood. You might decide to make your own template using features of existing ones you find elsewhere.
Business Debt Schedule Example
Here’s an (imaginary) example of a small business’s schedule of liabilities. The column headings represent the basic elements for debt tracking and management.
| Creditor Name | Origination Date | Original Amount | Current Balance | Interest Rate | Monthly Payment | Maturity Date | Collateral / Security |
|---|---|---|---|---|---|---|---|
| Main Street Bank | 01/15/2022 | $50,000 | $32,450 | 6.50% | $950.00 | 01/15/2029 | Equipment Lien |
| SBA (EIDL) | 06/10/2020 | $150,000 | $142,000 | 3.75% | $731.00 | 06/10/2050 | Business Assets |
| Carmaker Financial | 03/05/2023 | $35,000 | $28,100 | 4.25% | $550.00 | 03/05/2028 | 2023 Delivery Van |
| AcmeCard Business Card | 11/20/2021 | $10,000 | $2,400 | 18.99% | $250.00 | N/A | None (Unsecured) |
| GenericBank Mortgage | 02/20/2020 | $300,000 | $270,000 | 8.00% | $2,509.32 | 02/20/2040 | Office Building |
This table is set up as a formal snapshot of your business’s finances. It has a comparatively rigid format, similar to that of SBA Form 2202, and a lender could use the information in it to assess your creditworthiness.
Pegged to a specific date, the schedule’s information must exactly match the total liabilities on your balance sheet as of that same date. The debt schedule can act as a supporting document for your financial statements.
If you’re using the debt schedule for internal tracking, you may want to include additional columns. For example, you might include a payoff calculator column to show how extra payments affect the debt timeline, or a column for lender requirements (e.g., a certain minimum DSCR) to help keep you compliant with loan covenants.
The Takeaway
Companies use a business debt schedule, also known as a schedule of liabilities, to list comprehensive details on all outstanding loans — including the interest rate, payment amount, and maturity date, among others — typically in a spreadsheet format. The debt schedule generally excludes short-term expenses like payroll. Keeping the schedule accurate and up to date can be essential for effective cash flow management, strategic debt repayment, informed borrowing decisions, and plans with lenders and investors.
If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.
FAQ
What is a business debt schedule?
A business debt schedule is a detailed overview of all loans that a company is currently servicing. It generally starts out as an Excel or Google spreadsheet; templates are widely available. The document includes each loan’s source, starting principal, interest rate, current balance, maturity date, and any other details that may be useful.
What should be included in a debt schedule?
A business debt schedule typically includes all of a company’s outstanding loans, mortgages, equipment leases, lines of credit, and bonds. For each loan, the schedule should list the lender’s name plus the principal amount, origination date, current balance, interest rate, installment payment, maturity date, and any collateral assets. Of course, it’s fine to include additional information for the loans as needed.
How often should a business debt schedule be updated?
Lenders recommend reviewing and updating the debt schedule at least once a month, after loan payments post. By updating it frequently, you can work to be sure that balances, due dates, and any changes in terms remain accurate and timely. You’re also better prepared for any audits, refinancing discussions, or investor reviews.
Is a debt schedule the same as an amortization schedule?
A debt schedule is related to an amortization schedule, but they’re not the same thing. A debt schedule provides a high-level summary of all a company’s debt obligations and their maturity over time. An amortization schedule is a detailed table about a single loan, showing the breakdown of principal and interest in each payment during its life.
How can a debt schedule help with getting a loan?
A debt schedule can help a borrower secure a business loan in multiple ways. For one thing, having all essential debt information contained in one document could prove convenient for lenders. A debt schedule spreadsheet provides a clear, detailed overview of the company’s current liabilities, which fits into key loan approval metrics like the debt service coverage ratio (DSCR). The DSCR indicates the business’s ability to pay its existing debt and how well its cash flow could support additional loan payments.
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