Nov 13 Smart indebtedness, how it works for your business
When talking about indebtedness, the first thing that comes to mind is a high margin of debt that represents a great pressure within the financial state of a business. But today this term can be used and seen under a positive idea. “Intelligent indebtedness”, which is nothing more than asking for a loan specifically to invest, since the purpose given to it is what really changes this concept.
If you decide to apply for a loan for your business with the vision that its use will be beneficial in the development and improvement, you will be able to carry out an intelligent debt. But, how does it work specifically in a business, how to get it and what to do to keep it positive.
How does it work for a business?
Specifically within a business, intelligent indebtedness works in a way that is oriented so that in the end you manage to liquidate the amount you requested through the credit and additional obtain an extra margin that will be reflected as a profit. Here, “what will you use the money for” becomes the definitive point that will give way to an intelligent process or not.
Some of the strategies that pay the most in small or medium-sized companies that use smart debt to grow are:
- Creation of new products or services
- Process improvement
- Implementation of high level technology
- Expansion or renovation
Where to get an intelligent debt?
The ideal thing to have an intelligent debt, is that you look for the best offer of credit or loan that exists. Today certain financial institutions, specialize in loans for small or medium enterprises. And one of the characteristics that differentiate them from traditional banking is that in addition to providing a good service and adequate amounts, the requirements they request are lower.
That is, a bank normally requests a minimum of business existence, as well as income and without forgetting to have a guarantee or guarantee. While other institutions such as SOFOMES, only request the data of your business and your person to be able to analyze the viability.
What can be done to keep the debt positive?
There are three important points that you must analyze internally so that your indebtedness really is in an intelligent way and you take advantage of it to make your business better:
Analyze your financial status
The first thing before deciding to apply for your credit, is to analyze the financial status that your business has so far and what it can pay. That is, you must be completely sure that it is a good decision taking into account how it is working so far and the current debts you have. Here, it is advisable that you only have one loan at a time so that you avoid falling into debt over debt.
But if on the other hand, with this loan you want both to invest and pay some outstanding debts, then you should look for the right financial product. Well, there are also some types of credit that work for both. For example, in Konfío in addition to our traditional loans, we have Koncentra, which is a loan in which you get the amount necessary to settle your outstanding debts and also invest an extra in your business.
Choose an appropriate term to liquidate it
Another important point in making this decision is that the term you choose should be adequate. Well, if you choose a very long term you will only be trying to pay your debt without being able to notice the real benefit that you gave to your business. That is, for projects such as those that a SME needs to implement a credit in the short or medium term is ideal, because when you finish paying it you will still be enjoying the momentum that generated and even continue to improve on your own.
Pay in time and form
The most decisive point for it to remain an intelligent and positive way of acquiring a debt is to pay in time and form. Well, if you start generating default interests that only increase your debt, you will lose the sense of investing and improving. Our recommendation, besides that you choose a pertinent amount, is that you have a financial plan specifically to settle your credit in which you have the payment dates in mind.
Now that you know the concept of “smart indebtedness” and how to apply it in your business, you can devise the strategies that will keep you growing.