Regardless of the size, every business needs a large amount of money in order to start operating – find out how your business can benefit from taking a small business development loan in this article. Not only will we talk about the advantages, to help you make an informed decision we will also talk about the disadvantages that may come with taking a loan – so you, as an entrepreneur, will be able to weigh in your options and better navigate your business.
Advantages of taking a loan
One does not need a finance degree to realize how tough and fluctuative the economy climate is these days – with the ever increasing unemployment rates and staggering number of bankrupt companies, it’s easy for small businesses to get stuck hanging by a thread. In order to further their businesses, securing a small business development loan is undoubtedly one of the best decisions an entrepreneur can make. However, many small businesses still reluctant to make a decision to take small business development loan, most of them are worried it’ll only ruin their businesses – when in fact, not only is an efficient small business development loan able to help them out of the rut, it also helps the business grow. Below is a list of some of the advantages you may get from taking a small business development loan from a bank:
Lower interest rates
Bank, as one of many organizations where you can secure fund, provide multiple options of loan with interest rates lower than its lending agency counterparts.
When you take a small business development loan from a bank, tax relief is often provided as a small percentage of the profits used to repay your loan is automatically exempted from tax.
Taking a small business development loan from investors means you give up parts of ownership to grant to them; banks do not require any of this since they only ask for payment installments and interests.
Disadvantages that you must be aware of
Three of the aforementioned advantages may not be enough to represent everything you and your business can get from taking a loan, but we dare say it’s enough to paint a picture of how beneficial it is. However, there is a few disadvantages that come with it – and it’s the fact that the application process for small business development loan is extremely lengthy in nature and can be incredibly cumbersome.