Problems of Business Finance

1. Increase in the ratio of liabilities (debt) compare with the equity (cash).
2. When there is too much debt: High debt coverage ratio if the company’s net income to its debt payment is high.
3. Most start-up businesses have poor financial management.
4. Lack of positive cash flow to cover monthly expenses and payroll.
5. Making profit will be difficult when a company has credit cards with high-interest rates on loans.