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 Duplicated Interest?
Duplicated Interest is like a double-take in your financial records.
It's the interest expense that gets Duplicated Interest is like a double-take in your financial records. counted twice, but then gets adjusted to avoid giving an inaccurate picture of your cash flow situation.
Imagine you're tallying up your expenses, and you accidentally count the interest you paid twice—once as an expense, and then again when you're looking at your cash flow. Duplicated Interest is the amount you realize has been double-dipped and needs to be corrected.
So, to prevent understating your Cash Available to Service Additional Debt (CASAD), you add back the Duplicated Interest to your cash flow. It's like smoothing out a wrinkle in your financial calculations to make sure everything adds up correctly.
By making this adjustment, you're ensuring that your cash flow reflects the true amount of money you have available to handle additional debt payments without causing undue hardship. It's all about getting a clear and accurate picture of your financial health and making informed decisions about borrowing and repaying debt.