How to Deal with Small Business Debt

If a business has debt, how long is it ok to keep that debt?

Lesson Details:
April 27, 2020

Video Transcription: So how long should you let your business debt linger like you know I mean I know people want to get out of that but businesses I know they stay in that for like years years and years on end like they how does that why why is that different for businesses and how does that really work this video is brought to you by Appy Pie’s Academy why is business that different for a business than personal debt would be for a person yeah like why the business is just kind of like they have this continues that ongoing is it a business somehow I don't think itself reasoned logical business decision I think it's because business ABB's and flows a lot more than personal finances AB and flow so if your regular w-2 employee you kind of know what to expect that's going to come in and out and so you can be very strategic about how you handle debt and how you handle your income and with business it just can be so volatile especially depending on what kind of business you're in that you just become accustomed to carrying what for some businesses is an extreme level of debt because they'll have a line of credit you know it'll be a couple hundred thousand dollars even a small business could have fifty or a hundred thousand dollar line of credit and that line of credit goes up and down all the time and so they're sort of using that as an emergency fund which is dangerous because it might get closed down dan Miller is a he does the forty eight days to the work you love and I've interviewed him on my podcast he has a very interesting story about he was a gym owner he's always been an entrepreneur he's a super successful guy but many many years ago he owned gyms and the bank got sold and the note got called and it tanked everything it just started this snowball from Hell where he just had this massive Bank node and then it affected what he owed to the IRS so you even though businesses get in that cycle of feeling comfortable with having that line of credit go up and down it's not a certainty just cuz it's there today doesn't mean it's not gonna be there you know it's gonna be there for you tomorrow and that the bank isn't gonna call it and when they call it you know they're asking you to write a check so it is dangerous yeah I mean that's what it means when the bank calls your loan they're they're telling you it's time for you to pay off your loan friend which can be I mean it could be the death of your business yeah you don't want to hear that I don't know that's bad news.

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