While many individuals are skeptical of the concept of debt financing these days, the truth is they couldn’t be more naive. Every major company in the headlines and on Wall Street today operates with debt. Furthermore, every home on your block that has a mortgage is operating with debt. There is no reason to fear taking on debt for your company or for the right reasons so long as you understand the process and what it means to you.
Simply put, small business loans are debt. However, you have to remember that from an accounting point of view, debt is only one half of the equation! To take on debt you are actually getting something in return. The money that you borrow can end up making your business stronger than it ever was before! If you take that extra money for example and put it towards new equipment for your business that you already need, you can have a better operation in place!
Think about whatever piece of equipment you are currently using in any phase of your business. It could be computer hardware, software, cell phones, internet speed, etc. It could be the small tools you take with you on the job. It could also be an extra vehicle so you can hire an additional employee. There are so many things to think about for any given business that it’s almost too difficult to think of the possibilities that a small business loan could bring you!
Your business is your life. That’s why you’re searching for opportunities to make it stronger now and find ways to get ahead. The simple answer is that by taking out a small business loan, you will absolutely be able to upgrade your operations and get your work done better, faster, more professionally, and more of it completed in the same amount of time as well. Obviously the equipment is only one portion of your small business, but by being able to have the tools that the professionals do, you have a much better opportunity of being seen as a professional yourself.
People tend to shy away from debt simply because they don’t like the idea of paying someone back and being on the hook. However, think of a small business loan a little bit differently and you will see why it’s not such a bad thing and doesn’t deserve the negative viewpoint. By taking on a small business loan and getting better equipment, you not only can do a better job for all of your current clients, you can do a better job faster. Your clients will be happy that you get the job done quicker than your competition, and quicker than you originally quoted! That only leads to more time for getting additional clients and jobs, which then means you have more income coming in than before.
The additional income means you should at least have enough money to pay for your equipment, and probably more than enough to actually profit from. At the end of the day, you need to be comfortable with the debt situation you take on, but a small business loan can be one of the best decisions you end up making.