By Susan Mwenda Mulongoti
I was responding to someone on this topic. Thus thought I should share these points.
When it comes to borrowing money, what matters is to have three plans:
1. Definite use for that money. Sometimes people borrow
simply because there is money available for borrowing. Not
wise.
2. A plan to recover it within the borrowing period. Take into
consideration your income, cashflow and /or gross margins
and how they compare to the interest at which you are
borrowing.
If your margin is 40% and the interest rate is the same or
higher, how is that helpful?
I know someone who lends money at 60% interest rate.
Others say 20% per month. What does that come to?
3. A backup plan to repay in case you plan 2 doesn't work.
This is especially so in business. Not everything goes as
planned.
What method do you use for borrowing a and what are the
interest rates?
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About the Author:
Susan Mwenda Mulongoti is an SME coach, author and digital marketer. She helps small businesses improve their sales and marketing and larger organizations with their digital and content marketing.
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