- Advance payments are made before the goods or services are received.
- A credit loss allowance is an estimate of debt that a company is unlikely to be able to recover.
- Bad debt refers to loans or outstanding debt balances that are no longer considered recoverable and must be written off.
- A guarantee helps a financial institution that is on the verge of bankruptcy by demanding the cancellation of debts to creditors and depositors.
- Banker’s acceptance is a form of payment that is guaranteed by a bank and not by an individual account holder.
- Interim financing can take the form of debt or equity and can be used at the time of the IPO.
- A commercial loan is provided between a bank and a business, used to finance operating expenses and capital expenditures.
Debt is money borrowed by one party from another.#
- Any type of instrument initially classified as debt can be considered a debt instrument.
- Debt issuance involves the offer by the creditor of new bonds or other debt instruments in order to obtain borrowed capital.