When is the best time to borrow to increase revenue?
Many entrepreneurs feel a little lost in running or expanding a business. How and where to get enough capital? Is it really time to try to increase revenue?
Small and midsize businesses are easier to borrow, but that doesn’t mean planning shouldn’t be done. Even with the intention of increasing revenue, it is necessary to keep in mind that the amount borrowed must be repaid later.
When to borrow?
Modernize the company
New equipment or a new market image can contribute to your company’s revenue. A loan becomes useful here, as actions like these tend to bring good results.
Expand the business
Some companies get so big that relocating in search of a larger location or even opening other units becomes the primary choice. The loan can act as a complement to the purchase of new real estate.
Pay off debts
Often, it may not be healthy for the company to take out amounts to pay off debt. If CET (the Total Effective Cost), the rate that considers all charges and expenses of the credit operation – including the interest rate – is cheaper, it is worth borrowing to pay off debt and contribute to business revenue. .
How to get loan?
Having a clear objective about the purpose of the loan is the first step. In the case of increasing revenue, attention needs to be paid to some points: Comparing financial institutions. Review credit lines, terms, number of installments, fees and limits. Be aware of restriction factors such as minimum equity value, legal status of the company, etc. Build a well-structured business plan. Any institution will only give credit if the company is able to pay the debt and know exactly where to apply the money. Submit the required documents and apply for the loan. The credit release or restriction response takes no more than a few business days.
Attractive option: online loan
Unlike traditional institutions, online lending offers lower rates; no need to move; When simulating on the creditor’s website, all information such as installment amount, interest and CET is offered on your computer or mobile screen; and there is not even half the bureaucracy present in the other banks.
Even with so many advantages, it is essential to know the creditor, looking for its credibility both on the Internet and in regulatory institutions, such as the Central Bank of Brazil. Many staunchers apply scams through reputable institutions or create a false institution.