Right from choosing a banker to proper utilization of the money received, you will need to have and follow a strategic approach to start, run and continue to survive your business, especially if you plan to start it when you are in debt. Yes, in debt! No matter how strongly people may advice you to drop the idea, you can be as successful as several millionaires starting your business in debt.

All you need is to make several considerations and work according to your business needs, availability of finance and the demands of the market.  Irrespective of your financial or economic background, you must know all aspects of business such as:

  • Finance management
  • Business administration
  • Ways to prepare a proper budget
  • Maintaining the books of accounts
  • Proper filing of records for taxes and returns
  • The governing laws and its requirements
  • Deciding the price points
  • Ways to generate more revenue
  • Calculate the rate of success and much more.

All these considerations will ensure smooth running of your business, stay ahead of the competitive market and ensure survival of your business.

Diligence in approach

You should also show due diligence in your approach towards your business management and never mingle personal and business finance since the line of demarcation between the two is very thin. If you wish to stay out of the vicious circle of debt then you must never involve your personal finance with your business to ensure its long-time survival.

Apart from that, you must also show due diligence when you borrow money for your business from a bank or any other Lines Of Credit. You must:

  • Not sign on the loan agreement without reading the fine print and with the first available lender rather do some research
  • Never give in to the hardships and challenges that may come down the road but consult an expert advisor regarding it and to find ways to overcome it effectively and successfully
  • Compare the terms of loans, rates of interest and visit the lenders in person after knowing about them from their internet portal and
  • Understand your expenses and the consequences of debt before taking a loan and consider your budget to find out the areas unnecessary to spend on and curtail it accordingly so that you borrow less.

Therefore, it is necessary for you to know the basic qualities of a lender, types of loans and credits available, the eligibility required, purpose and need of the business loan, your business status and prospects of profitability of it.

Choosing a lender

Now that you know about debts and its pros and cons, you must choose a lender which can be a bank or any other, considering the following points:

  • The level of commitment of the lender is very important so that you establish a strong entrepreneur-lender relationship. Relying on online lenders is not an absolute no-no but it is recommended that you exercise more caution while choosing one. Whether it is for acquiring a loan or looking for a debt relief program and assistance, it is always recommended that you go for companies that are highly reputed, known in the market, have been in business for years and have a lot of positive reviews.
  • You may also look out for government backed financing and talk to the Small Business Administration for SBA loans. These loans are very helpful as well as require much less documentation. It has fewer requirements as compared with other loans.
  • Also consider the quality of service of the banks or lenders. It is wise to choose smaller banks if you have to for your small business loans as they will provide far better service than the larger banks. Thefocus on the customer will be more and they will be more flexible in their loaning approach. These smaller banks will be able to accommodate your needs easily than any larger banks.

Look for affordable business checking accounts since the rates and fees are almost similar with all the banks. Choose an account which is cost effective, easy tooperate butconsider your cash flow whether it is in cash or in credit so that you can avail the two monthly limitations that such business checking accounts usually have. If your financial status wants for more, you can go for premium accounts.

Consider your approach

The way you approach with your business finance will help you to stay out of debt. it is essential that you maintain a proper balance between your existing debt and the additional ones which you may probably take on in the future.

  • To begin with, consider the situation of your existing debts and be honest with it. Consider the type of debt, whether it is good or bad.
  • Next up, you must consider the number of debts you have because if there are too many debtschances are high that you may not receive any fresh loan for your business.
  • Also look for your credit history as that is the most significant aspect that will determine whether or not your loan application will be approved. Therefore, if you have a weak credit, look for ways to improve your FICO score. To get rid of your debts you can apply through national debt relief and other reliable sources. Manage your personal finance well to get a business loan.

Also have a very strong business plan if you want to start a business on debt. The plan should show the feasibility of the business, the prospects and include all essential elements that will attract the notion of the lender. You must also include all the repayment programs and define it clearly so that the lender is comfortable and feels secure to lend you money for your business.

You must also be very strategic about your research analysis and include elements such as:

  • Your business size
  • Demographics of targeted customers
  • Projected data for marketing
  • Strengths and weaknesses
  • Income forecast
  • Projected cash flow
  • Balance sheet and accounts and
  • Budget.

Having a better strategy and implementationwill make your efforts easy and productive.

Author Bio

Marina Thomas is a marketing and communication expert. She also serves as a content developer with many years of experience. She helps clients in long-term wealth plans. She has previously covered an extensive range of topics in her posts, including money saving, Budgeting, business debt consolidation, business and start-ups.


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