What is a business debt schedule, and how do you build one?

What a debt schedule is, and what it is not

A debt schedule is a snapshot of everything the business owes to lenders and financing companies on a given date, laid out so a credit officer can read the whole picture on one page. It is not the amortization table for a single loan, which shows one loan's payments over time, and it is not the liabilities section of the balance sheet, which lumps debts together and often leaves some out.

It appears on every one of Transparent's lender checklists. For an SBA loan the checklist asks for the debt schedule together with copies of the notes being refinanced; for a line of credit or asset-based loan it asks for the debt schedule with the UCC position, meaning the existing liens on the assets. A lender reads it for three things: how much the business pays each year to service debt, who already has a claim on the collateral, and what the new loan will replace.

The columns lenders expect

The purpose column looks like a formality and is not. SBA loan proceeds cannot refinance debt that funded a distribution to owners, and lenders generally look harder at debt that paid for losses than at debt that bought equipment. A line that says "working capital" should be something the owner can explain if asked.

A worked example

The schedule below is for a hypothetical services company, in plain numbers (thousands), on the same date as its balance sheet.

Two things stand out to a lender reading it. First, the cash advance is the smallest balance but the largest payment: its balance is about a fifth of the bank term loan's, yet it takes about 144 a year against the term loan's 108. Second, the advance's UCC filing on receivables sits alongside the bank's lien on all assets, which is often a default under the bank's loan and is the first thing a new lender will want resolved. See refinancing cash advances into term debt and blanket liens.

Tying the schedule to the balance sheet

A lender's first test is whether the schedule's total agrees with the debt on the balance sheet at the same date. In the example, the balance sheet shows notes payable of 645 and a shareholder loan of 100, a total of 745. The schedule shows 830. The difference of 85 is the cash advance: the bookkeeper recorded the funded amount as income and the daily debits as an expense, so it never appeared as a liability. That is common, and it is exactly the kind of gap a credit officer will find in the bank statements if the schedule does not explain it first.

• Match the dates. Use balances on the balance sheet date, not today's balances against a year-old balance sheet.
• Split current and long-term. The principal due in the next twelve months should agree with the current portion of long-term debt on the balance sheet.
• Check the interest. Divide the year's interest expense on the P&L by the average debt. If the result is far above what the loans on the schedule carry, something expensive is missing, often an advance or a lease whose cost is booked as interest.
• Check the bank debits. Every recurring payment to a lender, lessor or funder in the bank statements should map to a row.
• Check the liens. A UCC search lists every secured creditor that has filed against the business. Each filing should map to a row, or be terminated. See UCC-1 financing statements.

Why coverage depends on it

The debt service coverage ratio divides the cash flow available for debt service by the annual payments, and the annual payments come from the schedule. SBA requires coverage of at least 1.15x (1.0x globally, including the owners), and from 1 October 2026 a change of ownership must show 1.25x on historical results. Conventional bank lenders commonly look for at least 1.25x. A schedule that leaves out a payment overstates coverage, and the lender's own recalculation will undo it.

In the example, with cash flow of 520, coverage on the full schedule is about 1.7 times. Leave the advance off and the same arithmetic gives about 3.1 times, until the lender finds the daily debits. The honest number is the one the loan will be sized on either way.

Lenders also apply their own conventions to certain rows:

• Lines of credit: some lenders count only the interest; others impute a repayment of the drawn balance over a set period, which raises debt service.
• Cash advances: the daily or weekly debits are annualized at their actual pace, which is why an advance weighs so heavily on coverage.
• Equipment leases: lease payments are usually included as debt service or as a fixed charge; see DSCR vs FCCR.
• Owner loans: with no scheduled payment, they are often left out of debt service if they are subordinated to the new lender; see how lenders treat owner loans.
• Seller notes on full standby: no principal or interest is paid while the SBA loan is outstanding, so the note carries no debt service.

What a refinance needs from it

In a refinance, the schedule becomes the payoff list. Each row is marked as paid off at closing or surviving, and the payoffs, any prepayment penalties and the closing costs together become the uses of the new loan. The surviving rows, plus the new loan's payment, become the debt service the new lender tests. A payoff letter will be needed for every row being paid off.

On an SBA 7(a) refinance, the schedule also shows whether each debt qualifies. The new payment must be at least 10% lower than the payment on the debt being refinanced, and that debt must have been current for the last 12 months. SBA will not refinance an active merchant cash advance or a factoring agreement. From 1 October 2026, an advance becomes eligible only once it has been converted to a term loan that has amortized for at least 24 months with no new advance since. The detail is in refinancing existing debt with an SBA 7(a) loan, and the refinance-specific version of this page is preparing a debt schedule for a refinance.

Build the schedule before choosing the loan. Which debts qualify, and what the payments add up to, often decide which loan the business should be applying for.

If you do not have one

Most owners do not keep a debt schedule, and they should not have to build one from scratch before talking to a lender. Transparent builds it from the documents already on file, such as the balance sheet, the notes, the loan statements, the bank statements and the lien search, and the owner confirms each line before anything goes to a lender. The reconciliation to the balance sheet is done at the same time. The schedule then feeds the financing model's sources and uses and its coverage tests directly, as part of the lender package described in the package.