Commercial Loan Repayment – Can You Handle The Truth?

Commercial Loan Repayment – Can You Handle The Truth?

During both economic growth and recession, you hear the need for governments and especially banks to provide loans to small businesses to stimulate and expand the economy. Well, understanding that our economy is based on credit, I see nothing wrong with these sentiments at all. But what you don’t hear about often enough is the small business that doesn’t want to, and in most cases simply can’t, repay the loan once it’s received. Not to mention even a profit. This part of business lending doesn’t get as much attention as it should. Not in a way that would scares or intimidates people from starting and running a commercial loan business, but somehow…yeah. That’s why…

Know what you’re really getting into by taking out a business loan
Oh let me count the ways…not really but maybe one day. For now, however, understand that if and when you apply for and receive a commercial loan, YOU MUST PAY BACK WHAT YOU OWE WITH INTEREST. Common sense you might say, but not so common sense, I would reply. Business loans from a bank with or without a government guarantee THEY ARE NOT GRANTS. Not to sound contradictory, but one way or another you will pay off. Well, even in case the bank or lender has to suffer a loss, believe me, the probability of getting a business loan anytime soon is really low. I’m not saying impossible, but damn close friends.

Why is paying off a business loan important?
Credit rating and reporting…need I say more. Both personal and business credit scores and reports are significantly affected by your ability to pay on time and as agreed. Again, our economy is built and functions on the foundation of credit. This is another way of saying that you are trustworthy and work with integrity. Hell, if you’re not paying people, let alone the bank, on time and as agreed, then you’re not running as a trustworthy person. Now there is an understanding that life happens and unfortunate events befall the best of us. I would venture to say that there is mercy for this man communicates these life events in a proactive manner rather than running on the hills and hiding.

Then understand and take to heart that business loans are NOT FREE MONEY. Know the details and full scope of what you’re signing up for and plan accordingly in case life happens.

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