Fuzzy Ebitda Math That Fueled Junk Debt Boom Is Sparking Jitters

Imagine walking into a bank to borrow money. The loan officer might ask for your pay stubs and tax returns to prove your income, as well as for information about your debts and monthly expenses to determine whether you’re a worthy borrower. If the numbers don’t add up, you’d be out of luck.

But what if you could convince your bankers that your income is higher than your stack of documents indicates? What if you promised some belt-tightening over the next couple of years that included moving to a cheaper neighborhood, getting rid of your gym membership, and cutting back ...