Debt! It’s always been a scary concept in our personal lives. Accruing liabilities can negatively impact our daily lives and be a major roadblock in creating wealth. However, when it relates to small business loans, leveraging debt can be beneficial to a business and allow them to use the acquired capital for their business needs.
It is important to understand leveraging debt and small business loans carries a cost and making sure the benefit of whatever you want to direct these funds towards outweighs the total cost of your loan (yes, the total cost of your loan, not just monthly interest rates)
Therefore, we get to Leverage! Leverage is the utilization of debt to make more money. Sometimes as a business owner, you don’t have enough cash or don’t want to use the cash you have to expand your business, purchase equipment, increase payroll, renovate, build, procure technology, or consolidate your debt. So what do you do? Just not expand? Save up for years hoping your savings will outpace inflation?
Time is a valuable asset
That’s where small business loans can go from bad to good – a liability to leverage. Loans can be used as time saving tool – one of your most valuable assets. Time is valuable: inaction can cost small business owners more than potential losses due to small business loans.
It’s important to reiterate that small business loans have a cost. The cost of a loan can be too much if you are seeking them from aggressive lenders. There are hundreds of lenders out there who will gladly fill their pockets at the expense of your business. So be careful, and choose lenders who will actually help you grow. It’s your business, take charge of its finances.
Here at Gravity Capital, we ensure our merchants can take on additional loans, and the repayment is flexible to their earnings, not causing them cash flow issues. We invest in our merchants and make sure they take advantage of their loans to become successful.
