In both times of 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 don’t see anything wrong with these sentiments. What you don’t hear often enough, though, is about small businesses that won’t and, in most cases, simply can’t pay back the loan once it’s taken out. Let’s not even talk about the reward. This part of business loans doesn’t get as much publicity as it should. not in a way that scare or intimidate people from starting and operating businesses with commercial loans, but in a way… yes. This is why…

Know what you’re really getting into when getting a business loan
Oh let me count the ways… not really, but maybe one day. For now, however, understand that if you apply for and obtain a business loan, YOU MUST PAY WHAT YOU OWE WITH INTEREST. Common sense, you might say, but not so common, I’d say. Commercial loans from a bank with or without a government guarantee THEY ARE NOT SUBSIDIES. I don’t want to sound contradictory, but one way or another, you will pay. Okay, even in the event that the bank or the lending source has to take a loss, believe me, the probability of getting a business loan in the short term is really low. I’m not saying impossible, but very close to my friends.

Why is business loan repayment important?
Credit Score and Reports…I need to say more. Both personal and business credit reports and scores are significantly affected by your ability to pay on time and as agreed. Once again, our economy is built and functions on credit. This is another way of saying that you are trustworthy and that you operate with integrity. Heck, if you’re not paying people, let alone the bank, on time and as agreed, then you’re not operating as a trustworthy person. Now, there is an understanding that life happens and unfortunate events happen to the best of us. I would dare to affirm that there is mercy for the person who communicate these life events in a proactive way instead of running through the hills and hiding

Understand and take seriously that business loans are NOT FREE MONEY. Learn the details and full scope of what you’re signing up for and plan accordingly in case life happens.