Finding out a business financial debt amount ?

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24,382
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Central Florida
I'm watching FOX TV show called Kitchen Nightmares and a business owner is more than $900,000 in debt. How can I find the debt amount of a business in my area / neighborhood ? I can find tax info from my county website, but I would like to know loan / vendor debt owed to creditors.
 
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25,816
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Upstate NY
If its a publicly traded company then they will file annual reports. If its a private company, no legitimate way to find out.
 
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Greatest Earth on Show, UT
Originally Posted By: Donald
If its a publicly traded company then they will file annual reports. If its a private company, no legitimate way to find out.
And no legitimate reason, as far as I can see. Why are you interested in such info? If you are thinking of investing or buying into a business, then you would get that info as a part of your due diligence. The only other reason I could see for wanting such info would be to help you determine if they were going to be around in another two or three years to honor any sales promises/maintenance packages/warranties/guarantees. But like it was said, debt is only a part of the picture. $900,000 in debt is probably a major issue for a mom and pop restaurant, but for a small chain of farm equipment dealers, it might be considered a low debt load.
 
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ME
If there are liens reported against a business these are usually research-able. Try the courthouse.
 
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NorthEast
If that company were to offer employment to somebody, don't *they* run a credit check on the prospective employee? Why can't tables be turned??
 
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CT
Because most employees are not sophisticated enough to read a profit and loss report and understand it, nor is it their business unless its a publicly traded company. Again the $900k number is meaningless without further information.
 
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Win

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4,705
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Arkansas
Originally Posted By: LT4 Vette
I'm watching FOX TV show called Kitchen Nightmares and a business owner is more than $900,000 in debt. How can I find the debt amount of a business in my area / neighborhood ? I can find tax info from my county website, but I would like to know loan / vendor debt owed to creditors.
Without any context, that $900K number is meaningless, but was probably put out for shock value for people who watch nonsense like "reality" television. Loans secured by real property, i.e., mortgages, will have the companion mortgage filed as a public record in the county seat of the county in which the securing real property is located. The mortgage will state a face value - if it is an amortized loan, there may be sufficient information in the mortgage to reverse amortize the loan. If it provides for future advances (most commercial mortgages do) the current status of the loan could be for a greater amount than the face value of the mortgage. Loans collateralized by personal property will have the UCC filing instruments filed at the secretary of state of the state(s) in which the collateral is located, and, depending on the state, may have duplicates filed at the county level. Vendor information might be contained in a credit report, assuming you meet the legal requirements to have access to that information, but many creditors do not report, and the information is often wildly inaccurate in any event. Sheesh, don't they teach anything in school anymore?
 
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NH
Certainly not financial stuff. I certainly didn't learn about financial stuff in the 90's. Then again, that was up in Maine, nobody had money anyhow.
 
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MN
The more important number is their debt/asset ratio. Their debt number is useless, for one company 900k might well be far more than the company is worth but for another that might just be their monthly floating debt while payments are coming in and out. It's pretty common for a company to have 30 day notes that exceed their cash balances but their cash flow is more than adequate to satisfy the notes at the end of the month. If you need to know a company's debt then you also need to know what their receivables look like
 
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Nebraska
Originally Posted By: hattaresguy
Because most employees are not sophisticated enough to read a profit and loss report and understand it, nor is it their business unless its a publicly traded company. Again the $900k number is meaningless without further information.
It would be quite interesting if $900k in debt showed up on a P&L. wink
 
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CT
Originally Posted By: strat81
Originally Posted By: hattaresguy
Because most employees are not sophisticated enough to read a profit and loss report and understand it, nor is it their business unless its a publicly traded company. Again the $900k number is meaningless without further information.
It would be quite interesting if $900k in debt showed up on a P&L. wink
Ouch that's what I get for typing a response while eating lunch and talking on the phone.
 
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809
Location
Nebraska
Originally Posted By: hattaresguy
Originally Posted By: strat81
Originally Posted By: hattaresguy
Because most employees are not sophisticated enough to read a profit and loss report and understand it, nor is it their business unless its a publicly traded company. Again the $900k number is meaningless without further information.
It would be quite interesting if $900k in debt showed up on a P&L. wink
Ouch that's what I get for typing a response while eating lunch and talking on the phone.
Your heart was in the right place. wink And your point is truer than many people realize. I prepare financial statements for a living and the people I prepare them for have little clue what they're reading. Their only interest is in the income statement and "cash" line of the balance sheet. Receivables? Payables? A/R Aging? Cash flow statement? No one needs to know that junk! The president of my former company (telecom, ~500 employees) once asked me, "What is this?" It was a $300k note payable that the company had been paying on for years. He never noticed it. It's a miracle some of these people know which end of a pen to use to sign a check.
 
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2,107
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Appleton, WI
OP - if it's a privately held company, you likely have no way of knowing what their debt load is. I worked for a company that was heavily in debt far past what the revenue and capital could support, but anyone on the outside could not find that out unless an employee with the knowledge told them. Even a D&B report will only show the information that the company submits itself with regards to balance sheet numbers. It will show vendor payment histories, so if they are really late in paying vendors one can assume that cash from operations isn't enough to cover long-term debt because they can't even cover the short term stuff. strat81, I've dealt with higher-ups that fit that profile. How they ever rose to their positions is a mystery.
 
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