[ad_1]
If you’re running a small business, you’ll likely need to raise some capital at some point. There are many options for doing so—including borrowing from family or friends, taking out a small business loan from the bank, or relying on your credit cards. But no matter how you scrape together funds, it’s essential to consider how you will pay them back.
Westfield used industry sources and news coverage to compile a list of potential risks in borrowing money to fund a small business. According to a small business report by the Federal Reserve, nearly 3 in 4 firms with paid employees had outstanding debt in 2022. Among businesses with debt, 40% have borrowed $100,000 or more. Companies will have to pay those loans back over time, potentially burdening their business’s revenue.
Those who want to avoid loans or credit card debt may seek investors and offer equity in their business. However, this strategy has its own risks. The more ownership you offer to outside investors, the less control you have over your business strategies.
No matter what type of business funding you decide to pursue, make sure you understand the long-term consequences and risks that come along with it.
[ad_2]
Source link