Business Loan Repayment: Can You Handle The Truth?
In both times of economic growth and recession, you hear the need for governments and especially banks to lend to small businesses to stimulate and expand the economy. Well, understanding that our economy is based on credit, I don’t see anything wrong with these sentiments. What you don’t hear often enough, though, is about small businesses that won’t, and in most cases simply can’t afford the loan once it’s taken out. Let’s not even talk about the reward. This part of business loans doesn’t get enough publicity as it should. not in a way that scare or intimidate people start and operate businesses with commercial loans, but in a way… yes. This is why…
Know what you’re really getting into when you get a business loan
Oh let me count the ways… not really, but maybe one day. For now, however, please understand that if you apply for and obtain a business loan, YOU MUST PAY WHAT YOU OWE WITH INTEREST. Common sense, you may say, but not that common, I’d say. Business loans from a bank with or without a government guarantee THEY ARE NOT GRANTS. I don’t want to sound contradictory, but one way or another, you will pay. Okay, even if the bank or lending source has to take a loss, trust me, the probability of getting a business loan any time soon is really low. I’m not saying impossible, but very close to my friends.
Why is business loan repayment important?
Credit Scores and Reports…I need to say more. Both personal and business credit scores and reports are significantly affected by your ability to pay on time and as agreed. Once again, our economy is built and runs on credit. This is another way of saying that you are trustworthy and that you operate with integrity. Heck, if you don’t pay people let alone the bank on time and as agreed, then you’re not operating like a trustworthy person. Now, there is an understanding that life happens and unfortunate events happen to the best of us. I would dare to affirm that there is mercy for the person who communicate these life events in a proactive way rather than running through the hills and hiding
Understand and take seriously that business loans are MONEY NOT FREE. Know the details and full scope of what you’re signing up for and plan accordingly should life happen.