Six mistakes business owners make when taking out a business loan
Updated: May 10, 2019
A small business loan can be invaluable when you’re establishing your business or when an unforeseen setback occurs, but you don’t want a loan to be short-term gain and long-term pain.
Here are six common mistakes businesses should avoid when it comes to commercial finance.
Mistake #1: Not getting the right loan
A thriving business requires enough capital to meet expenses, expand and invest, but it’s important to know why you need the funds and what loan best suits that need.
Do you need to cover short-term cash flow shortages, for example? A line of credit could help, where you can access funds up to a pre-approved limit, and only pay interest on the outstanding balance.
Maybe you need new equipment? In this case, ask your mortgage broker about an equipment loan, where the asset is used as security while you make your repayments. This can potentially help make the loan easier to secure.