Funding a business is as difficult as running it. Of course when you already have a business, you don’t want to keep going in place, right? Business must continue to grow in order to become bigger. However, regarding developing a business is not an easy matter, an injection of funds is needed so that the business can grow as expected.
Finding funds for business is not an easy thing, many people who apply for loans to banks for example to get funding so that their business can be more developed. One way that someone uses to develop his business is to use a loan in the form of Unsecured Credit. However, is it really the right step? Check out the following article on how to use bank loans to grow a business.
Use Business Credit to Fund Newly Started Businesses
Many people often use unsecured loan to fund new businesses. However, it would be better if unsecured loan is used for personal funds only. Another way that can be used is by applying for a business loan to the bank. One of the advantages of using business credit in funding a business is that the bank will not interfere in your business. But unfortunately indeed banks often entrust their funds to be borrowed by companies that are more trusted. However, don’t worry because there are many banks that have programs that are ready to prosper the newly started business units, including micro business units.
Use secured loan Only to Develop Business Only
One thing you need to know, secured loan is not the best way to fund the business you just made. Comparison of the success that can be obtained by a new business starts around 50:50, so there is a possibility of failure standing in front of the eye.
So from that, the use of unsecured loan will be more appropriate to develop the business. This is because at least you already fully understand how to make money from the business that you have run. So, your chances of being more stable in repaying loans are greater than those who just started their business and haven’t really been on the battlefield.
Understand Interest and Installments per Month
This is pretty basic, of course you have to understand how much interest is given by the bank and how much monthly installments you have to pay each month. For example if you want to apply for unsecured loan in the amount of IDR 15,000,000, – for installments for 4 years (48 months). The interest you get, for example, 0.99% means that there is at least around Rp. 461,000 which must be paid every month, with the final total to be paid around Rp. 22,000,000.
Basically, all the net income per month (after tax) that you get from a business that has already taken place must be greater than the monthly installments that must be paid to the bank (net income per month after tax> monthly installments) . Ideally, the average net income for the last 12 months should be at least 2x greater than the monthly installments you have to pay to the bank. Of course this must also be accompanied by the assumption that the business you are running does not have the chance to get worse in the next few years.
Fees and Other Fees
When applying for unsecured loan to the bank, there is usually a provision fee (in a simpler language, it is called an administrative fee). Find out whether the bank that is willing to provide a loan for you will ask for fees and other fees to be paid in advance or not. If these costs must be paid in advance, then you also have to carefully recalculate, what are the remaining loans that you can get after deducting these costs.