Business Loan Glossary: Key Terms Every Small & Medium-Sized Business Should Know
Navigating the world of business loans can be complex, especially for small and medium-sized businesses. Our comprehensive business loan glossary is here to help. Whether you're applying for a loan or managing finances, understanding key terms is crucial to making informed decisions. Explore definitions, explanations, and expert insights to simplify your business loan journey and empower your financial growth.
What is a bankrupt?
A bankrupt is an individual or entity that has been legally declared unable to pay off their debts. When someone is declared bankrupt, it means they've reached a point where their liabilities exceed their assets, and they can no longer meet their financial obligations.
A bankrupt is an individual or entity that has been legally declared unable to pay off their debts. When someone is declared bankrupt, it means they've reached a point where their liabilities exceed their assets, and they can no longer meet their financial obligations.
There are typically two outcomes for someone who's declared bankrupt:
- Liquidation: Their assets are sold off to repay creditors as much as possible.
- Reorganization: A plan is created to restructure their debts and finances, allowing them to repay what they can over time.
Bankruptcy can give individuals or businesses a fresh financial start, but it comes with long-term consequences, like credit score damage and potential loss of assets.