Most small businesses and customers will encounter some form of debt in their lifetime, so it is vital for you to be aware of all the main types of debt to ensure a secure business and life ahead of you. Our bookkeepers for small businesses in Sydney will explain the main categories of debt.
Debt can come in different forms, so being prepared is essential and that’s what our small business bookkeepers in Sydney will do for you now, here are the main categories of debt:
It is any debt that is backed by an asset for collateral purposes, secured loans will most likely have a reasonable interest rate, which is based on your credit history.
This debt has not secure collateral and is when the lender gives you a loan without any assets being insurance and depends on the faith in your ability to pay them back on time.
This is where an agreement is made between the lender and the consumer, the revolving debt is based on a maximum amount that they can borrow from you at a time on a reoccurring basis. The consumer is free to spend as much money until the limit is reached and paid off.
This is the largest debt that any consumer will hold in their lifetime and are made to generally purchase a property, with the real estate being the collateral for the loan. These types of loans generally take up to 15-30 years of monthly payments from affordable property owners to pay off.
While buying stuff might seem nice, be sure that you are aware of any repercussion at hand and remember that budgeting for your business is one of the most important things for you to do and our small business bookkeeping company in Sydney knows all about that and is ready to help you.
Be sure to contact our small business accountant in Sydney with any enquires.