Pros and Cons of Taking Out a Small Business Loan

The Pros

  • You can grow your business more quickly with a loan, whether by opening a new location or expanding the variety of products you offer. That lump sum can help you make more giant steps in a shorter period of time.
  • With a small business loan, you won’t have to tangle with investors on your board of trustees. You’ll retain full control of the company and have the final say in what you do with your loan.
  • Cash flow problems can cause hiccups in any small business, but with a loan, you can overcome those challenges more quickly. Set your sights higher without worrying about small crises every step of the way.

The Cons

  • Many small business loans carry relatively high-interest rates, especially if your credit score isn’t what it could be.
  • Loan repayments will cut into your business’s profits for the term of the loan. You’ll have to keep to a strict budget to avoid late fees or even defaulting on the loan, both of which can harm your business’s credit score.
  • The loan application process itself can be lengthy — and rigorous. If you’re just starting out in business and haven’t established your presence yet, your application may be rejected.

In Summary

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Charu Mehrotra

Charu Mehrotra

Founder e-Magazine Womenlines, Entrepreneur,Unshakable Optimist. Subscribe www.womenlines.com