What happens when you are in debt or you need to incur debt (such as take loans) in order to achieve financial freedom?
If you had mentioned the word "loan" to me a year ago, I would have sent you back to the village people who sent you and told you to tell them that you didn't see me. This was simply because all I learned about loans growing up was that "it is bad, don't do it!" So, you could not blame me for any negative feelings I had towards debt.
However, the problem wasn't that being in debt was bad, the problem was that we were not financially literate. Taking loans in itself is nothing negative; in fact, if you want to do big things in business, chances are that you do not currently have the necessary capital to fund it and this is where investors and loan agencies come in.
However, there are a few things to take into consideration before taking a loan:
- In the case of a small business, ensure that you have savings, a side job, or another business to pay off your loan in case your new business does not yield the profit you thought it would yield.
- In the case of a big business, come up with a profitable and practicable business plan and present it to investors. For any time you get a rejection, go back to the drawing board, research some more and approach some more investors.
- Last but not least, ensure to always know when to take a break. Taking a break does not mean giving up. It simply is you realizing that you need to pay back current loans before the accrued interest gets out of your control and re-evaluate your business idea to see if you need to explore better strategies or a completely different business altogether.
What would you advise someone that is currently in debt to do? Do you have any suggestions for low-interest agencies that a prospective business owner can approach? Let's continue this conversation in the comment section below.