Debt limitation depends on what?

read · Apprentice Joined: 14 Mar 2005 Posts: 6

I have started a business and I expect to get a pretty good profit from it. I will be mostly in trading and I seek to assure the best possible position. I would thus like to know on what does debt limitation depend. If anyone could help me regarding that matter, it would be great.

gamaliel · Apprentice Joined: 24 May 2006 Posts: 4

Trading is indeed one pretty tough thing to do. You need a lot of knowledge, a lot of skill and courage to make the right moves. On the other hand, it is not just that. Risks are involved and you need to run a good and responsible business. The debts often occur, but are nevertheless quite manageable, and the more company has of equity, the more capacity it has to sustain long term debts. In short, the more assets a company has to cover for a debt, the larger debt it will be able to sustain. Hope you find the info helpful.