Loans payable
What it means
Loans payable is what the business still owes on money it has borrowed: term loans, equipment loans, a mortgage on a business property, or loans from owners.
On a balance sheet it's usually split in two. The part due within the next 12 months is a current liability; the rest is long-term. It's different from accounts payable, which is bills owed to suppliers.
See also: Accounts payable & short-term debt, Long-term business loans
Why lenders ask
Lenders add up everything the business already owes to see how heavily it's borrowed compared with what it owns, and to work out the payments it already has to make before a new loan is added.
Good to know
In the Loan Ready calculator, the part due within a year goes on the accounts payable and short-term debt line, and the rest goes under long-term business loans.