Episode
259
Tue, 06 Aug 2024 08:00:00 +0000
In today’s episode of Profit Tool Belt, Dominic and Leo Kanell talk about the smart ways business owners can use debt to grow their business. Here’s what you need to know:
When Should a Business Use Debt?
Using debt can be beneficial, but only when done wisely. You need to understand two things before you’re ready to take on any debt.
What Loan Costs Should I Watch Out For?
When taking out loans, be aware of the following unexpected costs that could hurt your business.
- Origination Fees: These fees can be negotiated. Try to keep them at 1-1.5% of the loan amount.
- Balloon Payments: These are often hidden, so keep an eye out! You’ll have to repay these in full before the loan’s term ends, so make sure you have the cash on hand before you sign anything.
When Do I Need a Loan?
If you don’t know how you’ll make a profit from the money, then don’t borrow. Make sure you have a plan for what the loan money will go towards, how long it will take to earn back more than you borrowed, and how you will get a good return. If you’re not sure, try getting a revolving line of business credit to handle expenses with more flexibility.
How Can I Get the Best Business Loans?
The most important thing for getting the best business loans is building good relationships with banks and lenders. A revolving line of credit can help prove that you will pay back any borrowed money, and knowing the right bankers ensures you’ll have the most options when it’s time to get a new business loan.
With these tricks you’ll have all the funding you need to fund your business expenses, letting you grow without spending your own valuable time and money!
Show Notes:
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