Persuasive Essay On Borrowing Money

Preparing to borrow money? Here’s what you should know before doing so:

• Borrowing money can help fund your business – allowing you to prepare for

emergencies and growth.

• The best time to get a loan is when you don’t desperately need one. It’s

important to plan ahead and think about funding your business today.

• A detailed and realistic 2-year business plan is the most important tool to help

you decide how much to borrow and what kind of financing to seek.

Most people understand the basics of consumer debt: if you rack up more expenses

on your credit card than you can pay back, you’re in big trouble. But, for some reason,

when it comes to small business debt, the picture isn’t quite so clear.

Not all businesses are at a point where borrowing money is the best course of action

for them. So, what types of businesses should think about taking out a loan? How much

debt is okay to incur? Considering all the available options, which kind of loan is right for

your business, and how can you ensure that loan helps you grow rather than weighs you

down?

To help answer these questions (and more), we went to some of the industry’s best,

including Drew Tonsmeire, an Area Director of the Small Business Development Center;

Mitchell Weiss, loan expert and author of “Business Happens”; and Gregory Liegey,

volunteer with the SCORE Association and vice president at Metrobank.

Is Your Business Ready to Borrow?

Before you decide borrowing is the right path, consider other options.

Being a responsible borrower means looking for every possible way to not take out a

loan. A simple option to make sure your business keeps running smoothly is to work

with your vendors. For example, if you own a bakery that caters to co...

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...ly want to finance that for less than a year.”

Considering these timelines, you could separate your lending into multiple loans so you

can get different terms for each expenditure, says Tonsmeire: “Maybe you look into an

equipment lease or find one lender who can finance your equipment purchases, and use

another source for inventory and accounts receivable.”

Finally, to truly be a responsible borrower, Weiss recommends scrutinizing the default

provisions of the contract: “What happens if you fail to make a payment? What kind of

cure period do you have to right a wrong? Folks are so excited to get money that they

often don’t look at that provision section of the contract.” Weiss also emphasizes how

important it is to compare rates from many different companies to find the best one. As

with anything, shopping around could help you save dramatically.