There's a bill most contractors pay before they pay themselves. It doesn't buy anything new. It doesn't build anything. It just keeps yesterday's purchases from being repossessed.
Debt service. The truck loan. The equipment note. The line of credit you dipped into two winters ago and never fully climbed out of. Every month, money leaves your business for things you already own. That's the payment you make to stand still.
01
The two costs of debt
The first cost is the interest. Visible, on the statement, annoying.
The second cost is invisible and much larger. Every dollar of monthly debt service raises the floor your production has to clear before you earn anything. A contractor with $2,000 a month in debt payments has to produce that much more, every month, just to arrive at zero. Debt doesn't just cost money. It costs production. It's a raise you gave yourself, backwards, in installments.
02
The Payoff Sequencer
Run your debts. Nothing here touches your saved numbers.
Save your cash gap in Lesson 4 and it shows here: the stretch a line of credit floats.
- Months to debt-free
- 18 months
- Total interest paid
- $2,746
- Interest saved vs. paying no extra
- $963
The month each debt dies
- line of creditMonth 6
- equipment noteMonth 13
- truck noteMonth 18
Change a debt, the extra payment or the strategy and watch the payoff order.
03
The freed payment is a raise
When a debt dies, its payment doesn't vanish. It converts. A dead payment, pointed at the next debt, and the freed stack, aimed at a dedicated account once the last one clears: that's how debt service becomes the first capital you've ever deployed. Lesson 10 shows where it goes. This lesson is where it gets created.
MIKE'S EXAMPLE
Mike · General contractor, 43
Mike's monthly debt service: $2,100. Three payments, listed to the dollar:
- Line of credit: $4,800 balance, 12%, $240 a month
- Equipment note: $11,600 balance, 9%, $560 a month
- Truck note: $28,000 balance, 7.2%, $1,300 a month
- Combined: $2,100 a month, $25,200 a year
And the Lesson 4 connection. His deepest cash trough was $33,700, held for weeks at about $749 a day of burn. The line of credit is what floated it. That's the quiet partnership nobody prices: the gap is why the line exists, and the minimum payment is why it never dies.
Strategy: smallest balance first, plus $600 a month of extra attack. The line died in month six. Its freed $240 stacked onto the equipment note with the $600. The note died in month thirteen, seven months later. Then $2,700 a month, every freed payment plus the extra plus the truck's own minimum, hit the truck note. It cleared in month eighteen, six months ahead of its 24-month schedule. Interest saved along the way: $963.
The floor didn't wait for a trophy. The month the truck note cleared, Mike's floor dropped by $2,100 a month. He had just given himself a $25,200 annual raise, without selling a single additional job.
04
Write the Kill Order
List every business debt: balance, payment, rate. Circle the smallest balance. Write the month its payment converts to an attack payment on the next one. Then one sentence: what was bought with the debt, and was it worth the floor it added? No judgment. Just arithmetic and a little honesty.
05
Check Yourself
Answered 0 of 3
06
Enter Your Number
Your total monthly debt service, every business payment on money already spent. Lesson 6 uses your post-debt floor to answer a question most owners avoid: what are YOU paid?
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07
Put This Lesson to Work
DebtFree Shift runs this exact sequencing, payment by payment, until the last one clears. Weekly sit-down, plan on one screen, no spreadsheets.
08
Next
Lesson 6: debt shrinking, cash timed. One person in the company is still paid in leftovers. You.