Debt Financing Module

These flashcards cover key concepts related to debt financing, including definitions and essential terms.

Long-term note payable

An obligation a company has when it borrows money from the bank for longer than a year.

Interest

The cost of borrowing money, typically expressed as a percentage of the loan amount.

Principal reduction

The portion of a loan payment that goes towards paying down the original loan balance.

Amortization table

A schedule that details each loan payment, showing the breakdown of interest and principal reduction.

Loan balance

The remaining amount of money owed on a loan after certain payments have been made.

Repayment schedule

The structured timeline outlining when and how loan payments will be made.

Payment

The amount of money paid in a regular interval to repay a loan.

Debt Financing

The process of raising funds for business activities by borrowing.