Articles Details Risks, Strategies For Small Business Owners
Entrepreneur Magazine wrote an advice piece for small business owners, advising on cautionary measures when considering a short-term business loan. The piece opened with a warning about business owners who get “stuck in an endless cycle of greedy lenders and crushing debt,” and then added, “that doesn’t mean all short-term loans will bankrupt you.” The magazine emphasized the need to consider prices and payment schedules, pointing out that established borrowers may be able to find more attractive APRs from medium-term loans or SBA loans that are “one-tenth as expensive.” Entrepreneur also cautioned that businesses which may rely on few or “sporadic” payments may have trouble meeting a payment schedule. Notably, the magazine also discusses the options of planning for an early payback, writing, “If you’re going to go down the early payment route, just understand that, first, your interest likely won’t be forgiven, and second, if you’re refinancing that loan, then don’t do so with another short-term loan.” The National Federation of Independent Business has provided extensive resources for small business owners and entrepreneurs looking for loans. While highlighting the advantages of obtaining a bank loan, the NFIB has highlighted the critical importance of demonstrating profits and having a business plan, adding that banks are generally hesitant to take risks.
What This Means For Small Business
The National Federation of Independent Business has also provided resources for applying for SBA loans. Kurt Chilcott, President of CDC Small Business Finance Corp., commented: “Many small businesses have the perception that SBA loans are hard to apply for or that their business wouldn’t be eligible, but we’ve found that most small businesses meet the eligibility requirements, and they usually come away wondering why they had so many reservations in the first place … More small businesses should see what the SBA loan program has to offer for them.”
The National Federation of Independent Business has published advice on e-commerce for small businesses as well.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.