Should I take out a business loan?
Short answer
Only for an asset that will generate more cash than the payment. Never for payroll or operating shortfalls.
Good debt
A truck that gets you a new revenue stream. Equipment that doubles capacity. Property you'd otherwise rent. The cash flow from the asset covers the payment with margin.
Bad debt
Covering payroll because you're short. Buying inventory you don't have customers for. Refinancing personal credit cards into the business. All of these turn a one-month problem into a five-year one.
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