Within the question we should ask ourselves about borrowing there are a number of details we should consider.
1.The Right Reason.
- Is this for productive business and not for personal reasons?
- Will the things purchased with the loan make money imediately?
- How is using the loan better than saving the cash and buying later?
- Are all the the risks considered?
2.The Right Time.
- Have we been in business long enough to know our business well enough?
- How is this part of our business growth plan?
- Can we demonstrate that this will definitely improve sales and lead to growth?
- Will the purchased assets produce longer than the loan?
3.The Right Terms.
- Do we know multiple lending options?
- Do we know the true cost of the loan?
- Can we explain all the terms and conditions of the loan?
- Can we explain the pros and cons of each lender's offerings?
4.The Right Amount.
- Have we produces a cash flow statement?
- Will there still be surplus profit after meeting the payment obligations?
- If business does not pick up immediately can the payments still be made?