Say Yes to Debt – Exploring the Good and Bad of Personal and Business Funding
It is almost impossible not to borrow money to get ahead in our society. We use debt to finance our homes, cars, vacations, shopping sprees, and so much more. Even the United States of America is trillions of dollars in debt! Various financial books outline ways to get out of debt. However, no matter how much we pay off our loans, your home’s roof leaks, and you find yourself signing your name on the dotted line agreeing to the next APR rate. Yes, behind the American dream, there are mortgages, interest rates, and school loans – that some will pay for the rest of their lives. This is the downside of using personal debt, having your liabilities hijack your bank account in perpetuity.
However, when it comes to business, having debt may be a good thing.
According to Investopedia, new businesses with little financing are among the top reasons they fail. Companies often use debt to hire employees, cover upfront costs, inventory, and marketing to help scale their business. Therefore trying to cut costs without leveraging can be detrimental. On the other hand, having too much debt can significantly decrease revenue. That is why companies should have a set plan before using leverage to finance their assets.
Go ahead and take the initiative and book a discovery call with Powerhouse CFO to explore the best funding options for your business.
JoAnnah Thompson
Entrepreneur, Business Coach
