Having long-term debt other than profitable and can provide benefits to the company, but also has some risks. Some of the long-term debt risks include the things that we’d like to share with you. Meanwhile, if you need a long-term loan for your property construction, the mortgage fort Myers is recommended.
The longer the loan and repayment period, the higher the risk
Can only obtain limited funding sources from loan proceeds
Debt is a fixed expense to be borne by the company
Have a fixed payment due date
The possible value of the company’s stock will drop due to the high or low amount of loan
Long-term Debt Advantages
In addition to being ready to be faced with risk, having long-term debt with bonds has several advantages, including:
Bond interest is lower when compared with the dividend to be paid to shareholders.
Reduce the tax liability, this is because the interest on the loan is the cost charged to the company. While the dividend is a division of profit that cannot be categorized as charging costs.
The bond owner will have no voting rights in the company, so it will not affect the management and daily operations of the company.
Long-term Debt Management
If a person already has a loan in the form of long-term debt in the company, then the important thing that must be done by the company’s management is to make a long-term debt balance owned. The balance sheet consists of assets and liabilities. Balance Sheet is a company’s financial statements in one accounting period (1 year) which aims to calculate the company’s financial statements, such as the cost of income, the cost of corporate funds, and operational costs or the level of financial smoothness of the company at the end of the accounting period. The balance sheet will provide a basis for determining future financial decisions of the company.