Small Businesses Should Not Borrow Without a Sure Fire Plan to Pay it Back
Many small businessmen right now are complaining about the tight credit markets.
Still, the same business people haven't made money in their business in nearly a year.
In other words, they haven't turned a profit in any single month in over a year.
One has to ask why they want to borrow money in the first place.
Do they want to borrow money to offset operational costs? That's not a good reason to borrow money, because you always have to pay the money back and if you aren't making any money then your business is non-viable.
You see, small businesses should not borrow money unless they have a surefire way to pay it back.
The government and the small business administration are claiming that it must get more money in the hands of small business people.
Why, the government's policies and over regulation has made it nearly impossible to turn a profit in many subsectors and industries.
Now, they want the small business people to go into further debt just to stay afloat.
That sure doesn't make a lot of sense to me.
If the government really wants small businesses to do well they need to reduce regulation, red tape, and barriers to entry.
Then the economy will get going again, there will be more jobs, therefore more consumers spending more money and the businesses can succeed.
Borrowing money at a time when there are few customers and little if any profits is not a good idea.
Now, many believe that the recession is over and the businesses will eventually start turning a profit.
That may be so because the economy lags the stock market by 6 to 10 months, but we also have a jobless recovery which means fewer consumers are out buying things.
So we are not out of the woods yet.
Without a plan to pay back the money, and merely betting on the future, a small business person can just get further in debt and shouldn't borrowing money, perhaps why many banks aren't lending, it's a bad risk.
Whether it is a long-term and long-standing small business or a small business startup, there would be no reason to ever borrow money unless you are sure you can pay it back.
I hope you will please consider this.
Still, the same business people haven't made money in their business in nearly a year.
In other words, they haven't turned a profit in any single month in over a year.
One has to ask why they want to borrow money in the first place.
Do they want to borrow money to offset operational costs? That's not a good reason to borrow money, because you always have to pay the money back and if you aren't making any money then your business is non-viable.
You see, small businesses should not borrow money unless they have a surefire way to pay it back.
The government and the small business administration are claiming that it must get more money in the hands of small business people.
Why, the government's policies and over regulation has made it nearly impossible to turn a profit in many subsectors and industries.
Now, they want the small business people to go into further debt just to stay afloat.
That sure doesn't make a lot of sense to me.
If the government really wants small businesses to do well they need to reduce regulation, red tape, and barriers to entry.
Then the economy will get going again, there will be more jobs, therefore more consumers spending more money and the businesses can succeed.
Borrowing money at a time when there are few customers and little if any profits is not a good idea.
Now, many believe that the recession is over and the businesses will eventually start turning a profit.
That may be so because the economy lags the stock market by 6 to 10 months, but we also have a jobless recovery which means fewer consumers are out buying things.
So we are not out of the woods yet.
Without a plan to pay back the money, and merely betting on the future, a small business person can just get further in debt and shouldn't borrowing money, perhaps why many banks aren't lending, it's a bad risk.
Whether it is a long-term and long-standing small business or a small business startup, there would be no reason to ever borrow money unless you are sure you can pay it back.
I hope you will please consider this.