Discussing a Healthy Level of Business Debt

We found a great topic on Business.com that we wanted to bring to the attention of the readers on our site. Debt is a part of most successful business plans for an expanding company. “By taking loans or seeking financing, you’re giving your company the fuel it needs to grow.” It is really important to understand the true costs associated with borrowing in the money and the ROI that you will receive when you deploy the capital. This all starts with a solid understanding of your own businesses’ financials and a growth plan and strategy in place that allows for repayment without crippling your finances down the road.

What are you plans as a business owner? You must know the answer to this question for both the near term and the long term in order to successfully borrow working or expansion capital. Borrowing carries with it some risk but by being prepared and planning ahead mitigates this risk and allows for the debt that you do take on to help and not hinder your growth. Have a plan for every dollar you borrow and be able to point to revenue in the future that you can use to pay it off. Look for debt that has no prepayment penalties and can be flexible and grow with you.

Creating this plan could involve hiring extra help or seeking temporary outside counsel. Figure out the metrics that are important to your business and have been good indicators of past success either for your company or in your industry. There is no set amount that is a good or bad amount of debt, each business will have a unique set of circumstances so every business owner needs a holistic look at their situation and how they can borrow money to help them achieve the set goals that you come up with in your plan.

About Payplant

Payplant provides growth financing for entrepreneurs, by entrepreneurs. Its Pay Me Now^TM digital invoice-financing service provides cash to businesses when their customers pay too slowly. Payplant helps businesses with PO and Invoice Financing, Asset Based Lending, Term Loans and Customer Financing products. Payplant works with companies that don’t currently qualify for traditional bank financing, have grown too quickly for their current lender or are at the point in their evolution where an influx of working capital can elevate their business to achieve rapid growth. Payplant delivers fast and reliable funding, at very attractive rates and is completely on demand. For more information, visit www.payplant.com.