Both in times of economic growth and recession, the need is heard for governments and especially banks to make loans 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, however, is about small businesses that won’t, and in most cases simply can’t repay the loan once it is obtained. Let’s not even talk about reward. This part of business loans does not get enough attention as it should. Not in a way that I would scare or intimidate people start and operate business with commercial loans, but somehow … yes. This is why …
Know what you’re really getting into by getting a business loan
Oh, let me count the ways … not really, but maybe one day. However, for now, please understand that if you apply for and obtain a business loan, YOU MUST PAY WHAT YOU OWE WITH INTEREST. Common sense can be said, but not so common, I would answer. Business loans from a bank with or without government guarantee THEY ARE NOT GRANTS. Not to sound contrary, but one way or another, it will pay off. Okay, even in the event that the bank or loan source has to take a loss, trust me, the probability of getting a business loan in the short term is really low. I’m not saying impossible, but very close to my friends.
Why is business loan repayment important?
Reports and credit rating… 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 it is trustworthy and operates with integrity. Heck, if you don’t pay people let alone the bank on time and as agreed, then you are not operating as 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 communicates these life events in a proactive way rather than running up the hills and hide.
Understand and take seriously that business loans are MONEY NOT FREE. Learn the details and full scope of what you are signing up for and plan accordingly in case life happens.
