Credit is a normal part of business. The important issue is whether the business can manage its obligations responsibly. Understanding creditors helps explain cash flow, debt, business rescue and liquidation more clearly.
Frequently Asked Questions
What is the difference between a creditor and a debtor?
A creditor is owed money. A debtor owes money.
Can a supplier be a creditor?
Yes — if a supplier has delivered goods or services and the business has not yet paid, the supplier is a creditor.
Why are creditors important during business rescue?
Creditors can be significantly affected by the rescue plan and have rights within the business-rescue process.