Build an existing business debt schedule

The principle

List each lender or provider, product, original amount, current balance, payment frequency, payment amount, rate or pricing method, maturity, and security. Include lines, equipment obligations, shareholder loans, advances, and other financing relevant to the review. Label currencies separately and note amounts that vary with usage or sales.

Put it into practice

Reconcile the schedule with statements and accounting records. Translate daily and weekly deductions into the cash forecast without confusing them with monthly contractual terms. Record balloon payments and renewal dates. For a refinancing proposal, request current payoff amounts rather than assuming the accounting balance closes the facility.

What people often miss

Adding debt can breach restrictions in an existing agreement or create competing security claims. A new advance that repays another provider may deliver much less fresh working capital than its headline amount suggests. Keep the old and proposed schedules side by side so the business can see the change in payments, maturity risk, and usable proceeds.

Convert obligations into a calendar

A fictional business pays $300 on each business day, $800 once a week and $2,000 once a month across three facilities. In a month with 22 scheduled business-day collections and four weekly collections, those outflows total $11,800: $6,600 plus $3,200 plus $2,000. A month containing five weekly payment dates adds another $800. A monthly average may be useful for planning, but payroll must clear on actual dates.

Add the remaining balance, maturity, currency and any final payment for each facility. Record the quoted payment frequency without silently changing weekly into monthly or business-day into calendar-day. For revolving facilities, show the limit, drawn balance, unused availability and renewal or review date separately. For a sales-linked arrangement, keep both the contractual calculation and the current collection estimate.

Source: SBA: glossary of business financial terms

Model refinancing on both sides of closing

Suppose a proposed $80,000 loan will pay $52,000 to an existing provider and incur $3,000 of closing costs. Only $25,000 is new cash for operations. If the payment falls, also compare the remaining total payments and maturity: extending debt may ease this month's cash pressure while increasing the time and cost of the obligation. Use a current payoff letter because the accounting principal may omit accrued charges or amounts that remain due on early settlement.

Keep a version before the proposed transaction and one after it. Confirm which old facilities truly close, which security interests must be released and whether future access to an old line disappears. Include relevant shareholder debt, leases and other financing in the review even if their accounting labels differ. Separately identify disputed balances or contingent guarantees rather than concealing them or pretending every contingency is already a cash payment. The lender can then see both the known schedule and the uncertainties.

• Which dates create the heaviest cash burden?
• What balances differ from current payoff amounts?
• Which agreements restrict additional debt or security?
• How much new cash and payment relief remain after refinancing costs?

Source: Debt term sheet: terms and conditions explained

Your next-step checklist

• All providers, balances, and currencies
• Complete payment and maturity calendar
• Security, guarantees, and borrowing restrictions
• Current payoff quotes and net new cash