Get to the Point
While none of us really like to owe money, sometimes it’s useful. As long as the money you borrow is making more than it costs to borrow, you’ll come out ahead. By not borrowing you may be missing an opportunity as well. It will take a lot longer to build and grow a business if you only use your own money. Borrowing allows you to invest a large sum of money into your company to pay for things like new equipment with more capacity, or a faster production speed. An investment like that would allow you to grow the business, pay off the loan and ultimately improve your position. Debt financing versus equity financing also allows you to retain control over the company because you haven’t sold a piece of the company to someone else, who you are now responsible to. We’ll talk more about equity in lesson 4.
If you’re interested in learning about financing options or you’d like to learn how to pay down your debts, I’d be happy to talk to you about it.