floating debt


Continuously refinanced short-term debt for a company's ongoing operations. The advantage of floating debt is that there is a chance to benefit from reductions in interest rates. In addition, interest rates on long-term debt are often higher than interest rates on short-term debt, so the company might be saving itself money by refinancing short-term debt as opposed to borrowing long-term. However, the downside is that the company might suffer if interest rates rise and they have to refinance at a higher cost.

Use floating debt in a sentence

You should always know how much floating debt you have and be working hard to pay it off as soon as possible.

​ Was this Helpful? YES  NO 12 people found this helpful.

Our company CEO was arrested for misappropriating funds that he skimmed off the top of the company's floating debt we refinanced each month.

​ Was this Helpful? YES  NO 11 people found this helpful.

Our company has a lot of floating debt, mainly due to the recent acquisitions we have made. On average we purchase one to two companies a year.

​ Was this Helpful? YES  NO 11 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
floating charge floating exchange currency