Recovering from Covid-19 -

                   Should I seek financing?

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These days, many business owners are looking for financing. Some of our clients are financially strong, and to be honest, were just taking advantage of their right for the PPP loan. However, most businesses are hurting, facing real financial difficulties and are considering their financing options, assuming they can get some financing beyond the PPP loan.

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So, should you take a business loan or not? Here are just some thoughts or questions we should ask ourselves before securing financing –​

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Is this just a black hole?

For me, the main question would be – would obtaining financing truly get you the new beginning your business needs or the exact help your business needs to get back to profitability? Or is the loan just going go into a black hole that at best is going to earn you some time. ​

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Have a real plan

Do you have a real plan – what are you going to do with the cash received? Do you have a detailed plan showing how you are going to re-build your business? Even if your intentions are noble, such as keeping your long-time staff a little longer, your plan must be solid and sound, otherwise, this business loan might be the last your business takes.

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First get efficient, trim as much as you can

Have you reached to the bottom of it?  Have you trimmed all possible expenses? Cut some costs, overheads, employees? Reduced office space? If not, what are you waiting for? Do not take a loan to fund these unnecessary expenses.

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Can you afford this?

Can you truly afford this? Do you have room in your cash flow for the loan payments? 

Does the loan you are able to secure come at a reasonable cost, compared to the ROI your business can achieve?

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Getting financing for taking advantage of business opportunities

Are there any business opportunities, such as buying the competition, that you could take advantage of? Would you need financing for this? 

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Secure minimum required working capital

Do you have the working capital cushion your business requires?