Debt & Your Company: How, When & What
Debt can be a scary thing for a small business owner. The trick is to know when and how to use borrowed money. Too much debt can strangle a company, as an owner struggles to make payments and satisfy lenders. But debt can also play a productive and critical role in your company, giving you the leverage you need to grow.
There are two key questions to ask yourself before going into debt. The first has to do with how you're going to be using the borrowed money: Are you spending the cash on an investment that will make more money for your business? The second question: Are you reasonably sure that you will have the cash flow to service the debt and repay the money? Don't forget that if you can't repay a loan on time, your company's credit score will suffer and it will be even harder to get financing in the future.
Read about Using Debt Correctly in Your Small Business
