Debt refers to borrowed money that one party, for instance, a business, must repay to another over time, usually with interest added as a cost for using those funds. In business-to-business (B2B) trade, debt arises when a seller provides goods or services on credit terms, creating accounts receivable for the supplier and payables for the buyer. This allows smooth transactions without immediate cash exchanges. Debt also enables supply chain efficiency by allowing buyers extended payment periods (e.g., net 30 or 60 days), helping manage cash flow while suppliers use this debt as collateral for financing from banks or factors.
