Glossary Of Debt Management & Financial Terms
Business debt
Credit that is provided to companies (LTD, PLC and LLP) and sole traders. This type of debt, if taken by a variation of the limited companies, is usually personally guaranteed if the credit is obtained from banks or building societies. If the credit is through supply of goods or materials for a limited company, the debt is usually, completely unsecured and if the company were to go insolvent, the remaining debt would be written off once the assets had been distributed between the creditors. Any credit provided for a sole trader is a liability for the named person trading as, where if the sole trader were to cease trading, the debts would still be their responsibility.
See also Private Limited Company (LTD), Public Limited Company (PLC), Limited Liability Partnership (LLP), Sole trader, Personal Guarantee and Insolvency.
