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 Cash Available to Service Additional Debt (CASAD)?
Cash Available to Service Additional Debt (CASAD) is like your financial safety net, specifically tailored for handling disaster loans.
Cash Available to Service Additional Debt (CASAD) is like your financial safety net, specifically tailored for handling disaster loans. It's the amount of money you've got left over after covering all your basic expenses, like bills and groceries. This leftover cash is what you can use to pay off a disaster loan without breaking the bank.
Think of it as the money you set aside for emergencies, but in this case, it's earmarked specifically for servicing a disaster loan. The goal is to make sure you've got enough cash flow to comfortably make your loan payments without stressing about your day-to-day expenses.
Now, here's the kicker: the target payment for your disaster loan is usually set at around one-third of your CASAD. This means that you're aiming to allocate about one-third of your leftover cash towards paying off the loan each month. It's a way of ensuring that you can manage the loan repayments without putting too much strain on your finances.
So, in a nutshell, CASAD is all about making sure you've got enough financial cushion to handle a disaster loan without sacrificing your financial stability. It's about being prepared for the unexpected and having a plan in place to weather the storm.