Some Myths About Business Debt
"Moving at the 'speed of cash' helps you pause and think."
Some Myths About Business Debt:
Myth 1: "I need to borrow money to start or expand my business."
Truth 1: You can run your business without debt. It takes patience and the guts to do things differently.
Most business owners wonder, How can I fund my business without borrowing money?2
Expand your business gradually and move at the speed of cash to lower your financial risk and minimize the impact from the mistakes you’ll make as you grow and learn.
Moving at the speed of cash has another advantage too: It helps you pause and think.
Using cash assets from your account activates the pain center in your brain so you’re more likely to question whether you really need to purchase that next item and all the company debt that comes with it.
Myth 2: "I need a line of credit to cover cash-flow fluctuations."
Truth 2: Cash Flow fluctuations are predictable when you use a proper and planned accounting system.
With good forecasting, budgeting and savings, you’ll be prepared for your off or slow-season and can provide your own line of credit with business cash assets.
Myth 3: "I need a credit card for Business expenses."
Truth 3: A debit card can do everything a credit card can do—including give you the same fraud protection—without the risks of carryover balances and massive interest rates.
Over 17% of new small businesses report using a credit card to finance their start up, not just make certain types of purchases.3
More than 53% of all small businesses report using a credit card to finance their business.4
When you use your debit card and spend cash assets instead of borrowing on a credit card, it helps you stay accountable to your budget.
Myth 4: "I can’t make inventory, equipment, real estate and other Business purchases without using debt."
Truth 4: Hold off on making a large purchase(s) until you slow down, think, plan and figure out the best way to grow your business.
The following four options are some of the best ways to spend money on big-ticket items or services:
1. Pay cash (which may mean you have to wait while you save).
2. Rent the equipment or space (this saves you from monthly payments you can’t afford and from buying more than you need).
3. Outsource. For example, if you’re not an expert in printing, let a printing company do it for you. Save the hassle and the money.
4. Buy used (which might mean tolerating the ugly and the old). It’s okay to be scrappy and make do with fewer bells and whistles while you’re getting out of debt or building your savings.
BUSINESS DEBT & CASH FLOW SOLUTIONS
Bernarsky Partners LLC is a business financial services advisory firm comprised of finance professionals with extensive industry experience offering Business Debt Solutions.
Some of our Business Debt Solutions include:
2. RESTRUCTURING BUSINESS DEBT
4. BUSINESS CASH FLOW ANALYSIS
Setup a free consultation call with us to review your business debt and cash flow situation, business goals and to discuss Business Debt refinancing and restructuring options.