A business bad debt is a loss from a debt created or acquired in your trade or business. Any other worthless debt is a business bad debt only if there is a very close relationship between the debt and your trade or business when the debt becomes worthless.
A debt has a very close relationship to your trade or business of being an employee if your main motive for incurring the debt is a business reason.
Example.
You make a bona fide loan to the corporation you work for. It fails to pay you back. You had to make the loan in order to keep your job. You have a business bad debt as an employee.
Business Bad Debt