When is the Best Time for Small Entrepreneur to Borrow Money?

 

It is almost common that small businessmen are the ones who need some kind of credit to help run their day to day business operation. However many of them make the mistake of applying for one when the need is already there. This therefore makes them desperate to take out a loan on the first licensed money lender in singapore he applies to and may even end up not getting one.  This may sound funny and even ridiculous but the best time for small entrepreneur to borrow money is when they don’t actually need it.

 

Why Borrow when you don’t need it?

 

It’s true that it sounds crazy when someone tells you to borrow money if you don’t need it. To a working person, or to the average earners, it is illogical to borrow money when they don’t need it but business is a different story. For instance, if you are engaged in a manufacturing business and suddenly, one of your equipment breaks and the estimate for repair or replacement is high. Businesses cannot handle sudden expenses that involve a sizable amount of money so the only recourse is to get a loan. However sizable loans are not easily approved or released immediately and loan processing may even take longer. The production suffers and the business loses money in the process. Business owners should visualize that production accidents happen and that the only security is to apply for a line of credit. This can immediately be used when unexpected things happen. The point here is to have a standby credit to solve unexpected event. Remember that if your business is doing well it would be a good security move to borrow money ahead of any disaster. Borrowingmoney can be part of your contingency plan that you can immediately put into action in the event of an unexpected financial problem. Remember that when you decide to borrow money only at the time when a misfortune arises, you may have a very difficult time applying for one. This unpreparedness can even cost you your business.