Running a business requires a clear picture of what you owe and when. You might have significant accounts receivable due next month, but payroll and vendors need to be paid today. In this case, relying solely on your current bank balance to supplement your cash flow isn’t a viable solution.
This is where a debt schedule becomes essential. Unlike a balance sheet that shows a snapshot in time, a debt schedule maps out your future payments. It helps you avoid missing payments, anticipate upcoming cash shortfalls, and provides the insight you need to make strategic decisions about your company’s growth. Learn what goes into a debt schedule, why it matters for your business, and how to build one step by step in Excel or Google Sheets.
What is a debt schedule for a business?
A debt schedule is a financial document that lists all business debt obligations, their repayment terms, and their due dates. It tracks opening balance, payments, interest expense, and closing balance for each period—typically annually or monthly—giving you a complete view of how your debt will evolve over time.
For a business owner, think of it as a master calendar for your repayment commitments. It calculates exactly how much cash will leave your company for debt repayment each period, splitting that payment into debt principal—the amount borrowed—and interest expense. Principal reduction affects the balance sheet, while interest expense affects the income statement.
On a standard business debt schedule, you will list everything that requires repayment. For most businesses, this mix includes:
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Long-term debt. The most common forms of long-term debt are traditional term loans from banks or through agencies such as the Small Business Administration (SBA), often used for capital investments like vehicles, heavy equipment, or real estate. They usually have a fixed rate and a set maturity date.
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Short-term debt. The most common types of short-term debt are working capital loans or bridge loans to cover gaps in cash flow. These often have higher interest rates and shorter repayment windows compared to long-term debt.
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Revolving credit. Revolving credit includes business credit cards and lines of credit, where the outstanding debt fluctuates based on your additional borrowings and repayments.
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Alternative financing. This includes merchant cash advances or revenue-based financing, where payments are a percentage of daily sales rather than a fixed amount.
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Subordinated notes. Subordinated debt is paid after what’s owed to more senior lenders and can have varying priority levels. Subordinated debt holders are repaid their share of debt, known as a debt tranche, last in the event of a business liquidation or bankruptcy. Understanding where each debt sits in priority helps you negotiate better terms and anticipate what happens if cash gets tight.
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Leases. Leases for equipment or office space often behave like debt and should be included in your debt schedule to get a true sense of your total debt service and cash flow obligations.
Reasons to use a business debt schedule
A debt schedule helps ensure you always have the liquidity to meet your obligations and the data to build reliable cash flow projections. Here’s how it helps with specific business challenges:
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Forecasting. Your cash flow statement requires accurate cash flow projections. For example, if you don’t know your total debt service outstanding, you won’t be able to accurately predict your free cash flow to pay end-of-year bonuses for employees or make tax payments.
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Managing interest expense. A debt schedule calculates your total interest expense by period. This is critical for your income statement, as interest is a tax-deductible expense, but principal repayments are not. Monitoring interest expense also helps you identify when to refinance into a new loan with a lower interest rate.
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Lender transparency. When you apply for additional funding or new debt, lenders typically ask for a debt schedule. They will calculate your debt service coverage ratio, which shows the share of your operating income devoted to debt payments, to determine whether you can take on more debt.
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Strategic payoffs. Seeing all your loans in one place helps you decide which loan to repay first. You might spot a high-interest loan that is eating up your profit margin and choose to pay it down aggressively, while making standard payments on your cheaper, low-interest debt.
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Covenant monitoring. Some loans have covenants or rules, such as maintaining a specific debt-to-equity or debt-to-cash-flow ratio. A schedule monitors your ending balances to ensure you are compliant with loan terms and avoid a technical default, in which the lender can impose penalties and demand immediate repayment.
What to include on a business debt schedule
To build a debt schedule, you need to record each loan, credit line, and other obligation. Your debt schedule includes:
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Lender name. Who holds each debt? Sometimes the original lender sells the debt to another financial institution, so tracking this helps you know who to pay and verify legitimate payment requests.
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Original principal amount. This is the total amount originally borrowed, which serves as your baseline for tracking how much you’ve paid down over time.
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Interest rate. This is either a fixed or variable interest rate, which fluctuates as prevailing market rates change. Calculate the annual percentage rate (APR), which includes interest and fees, to understand the actual cost of borrowing.
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Maturity date. The final date by which the loan must be fully paid, which determines your repayment timeline and helps you plan for refinancing if needed.
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Payment frequency. Monthly, weekly, or daily.
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Amortization period. The period of time over which the loan payments are spread, which affects your monthly payment amounts and total interest paid.
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Financing fees. Loans usually come with origination and servicing fees. In many cases, borrowers amortize financing fees, paying them over the life of the loan.
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Accrued interest. Any accumulated interest that hasn’t been paid yet.
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Security or collateral. Assets, such as inventory, accounts receivable, or real estate, that are used to secure the loan and can be seized by the lender for failure to repay.
Debt schedule template
Use this debt schedule template to project your own repayment timeline and assess the associated costs.
How to make and use a business debt schedule
- Create a loan details section
- Set up your columns
- Input loan terms and calculate payments
- Use the fill handle to drag formulas
- Estimate variable debt
To create a debt schedule, you can use a template or create your own in Excel or Google Sheets. Although financial reporting software can generate a debt schedule for you, a digital spreadsheet gives you the flexibility to model your debt yourself.
1. Create a loan details section
At the top of your spreadsheet, create a loan details section that summarizes the information about your loan. In the first column, include headings for the loan name, principal amount, annual interest rate, number of months in the loan term, and the monthly payment amount. In the second column, list the loan name, the amounts, and other details. This data will link to the debt schedule to drive your cash flow calculations.
2. Set up your columns
Under the loan details section, create a row for each month in the first column. For example, a loan that matures in three years would have 36 rows representing each month.
You will need a set of columns for each loan representing the debt balance calculations. Add each of these as columns:
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Opening balance. The debt at the start of the month.
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Interest expense. The interest expense is calculated based on the opening balance and interest rate.
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Principal repayment. The portion of your payment that reduces the balance owed, including any mandatory cash flow sweep—a requirement to use any excess cash to pay down debt principal.
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Total payment. The actual cash leaving the business’s bank account (principal and interest).
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Closing balance. This is calculated by taking the starting balance, then adding any new debt plus interest minus payments.
3. Input loan terms and calculate payments
For standard term loans with a fixed rate, you shouldn’t manually calculate the split between principal and interest expense because this blend of the two costs changes every month as the amount of principal owed declines. Instead, let Excel or Google Sheets do the heavy lifting using three specific functions: PMT, IPMT, and PPMT.
Here is how to use them for a standard monthly loan:
Calculate the total payment (PMT)
Use the =PMT function to find the total amount you pay each month.
Formula:=PMT (rate, nper, pv)
Rate: Your annual interest rate divided by 12
Nper: The total number of payments due based on the term of the loan
Pv: The original principal amount (enter this as a negative number to get a positive payment result)
Calculate the interest portion (IPMT)
Use the =IPMT function to isolate how much of that payment is just interest. This number will go into your Interest Expense column.
Formula: =IPMT (rate, per, nper, pv)
Per: The specific period you are calculating for (e.g., type “1” for the first month, “2” for the second, etc.)
Calculate the principal portion (PPTM)
Use the =PPMT function to find how much of the payment is actually lowering your debt principal. This number goes into your Principal Repayment column.
Formula: =PPMT (rate, per, nper, pv)
Tip: If you add your result from IPMT (interest) and PPMT (principal) together, they should equal your PMT (total payment). This is a quick way to check your schedule for errors.
4. Use the fill handle to drag formulas
Once you have entered the formulas in the first row of the table, you can use the fill handle to drag the formulas down, rather than entering them manually for each subsequent row. To do this, select the cell containing the formula you want to copy, then hover your mouse cursor over the bottom-right corner of the selection. You are looking for a small square dot.
Your cursor will change from a thick white cross in Excel or a hand in Sheets to a thin black cross. Click and hold the left mouse button, then drag the cursor down as many rows as you need. Release the mouse button and Excel will automatically fill the cells and adjust the formulas for each new row.
5. Estimate variable debt
For credit lines or revenue-based financing, such as merchant cash advances, you cannot use standard amortization formulas because the payment terms change. You will need to make some financing assumptions.
For credit cards, estimate the average debt balance you carry month to month. Calculate interest manually. The formula for this is (Annual rate / 12) x Opening balance.
Revenue-based loans are tricky because payments fluctuate with sales. Estimate your revenue for the month and apply the lender’s repayment percentage (e.g., 10% of gross sales) to project the debt repayment schedule for your financial forecast.
Debt schedule FAQ
What is a debt schedule?
A debt schedule is used in financial modeling and accounting. It provides a detailed timeline of debt obligations, tracking interest and principal payments by period to forecast cash flow and ending debt balances. It is essential for any financial forecast.
Do you put credit cards on a debt schedule?
Yes, but typically only if you are using the card for financing activities—carrying a balance over several months to fund operations. In this use case, your credit card acts as short-term debt, and you should include it to track the interest expense, repayment schedule, and impact on cash flow.
Is a debt schedule the same as a balance sheet?
No. A balance sheet is a snapshot of your financial position at a single point in time. It shows the closing balance of your total debt, as well as your total assets and equity. A debt schedule explains how you got from the opening balance to the closing balance. It details the movement of money—the interest, the payments, and the accumulation of more debt—over a period of time, whether a calendar or fiscal year.
How do you create a debt schedule?
To build out a debt schedule, in Excel or Google Sheets, list your loan details—such as interest rates and maturity dates—in a separate tab, then create a monthly timeline to calculate interest based on the opening balance. If the process becomes too time-consuming or you take on additional debt that necessitates complex modeling, consult a CPA or financial analyst.
*All loans through Shopify Capital Loans are issued by WebBank. Offers are subject to change based on several factors including your store's performance and the review of your financial information. Shopify Capital Loans must be paid in full within 18 months, and two minimum payments apply within the first two six-month periods. Offers to apply do not guarantee funding. Repayments are made based on a percentage of daily sales.
