Funding a business is as difficult as running it. Of course, when you already have a business, you don’t want to keep on going, right? Businesses must continue to grow in order to become bigger. However, regarding developing a business is not an easy matter, an injection of funds is needed so that the business can develop as expected. Finding funds for business is indeed not an easy thing, many people who apply for loans to banks, for example, to get funding so that the business can be more developed. One way that someone uses to develop their business is to use loans. However, is this step correct? Check out the following article on how to use bank loans to grow your business.
Use Business Loans to Fund a Starting Business
Many people often use KTA to fund new businesses. However, it would be better if KTA is used for private funds only. Another way that can be used is to apply for a business loan to a bank. One of the advantages of using business credit in funding a business is that the bank will not interfere in your business. But unfortunately, banks often rely more on their funds to be borrowed by companies that are more trusted. However, do not worry because now there are many banks that have programs that are ready to improve the welfare of business units that have just started, including micro business units.
Use KTA only to develop business only
One thing you need to know, KTA is not the best way to fund a business that has just been made. A comparison of the success that can be obtained by a business that has just started is about 50:50, so there is a possibility of failure that stands before our eyes. Therefore, the use of KTA is considered more appropriate to develop the business. This is because at least you already understand very well how to make money from a business that you already run. So, you are more likely to be more stable in repaying loans than those who have just started their business and are not really on the battlefield.
Understand Interest and Installments per Month
This is pretty basic, of course, you have to understand how much interest is given by the bank and how much repayments per month that you have to pay every month.
Basically, all net income per month (after tax) that you get from a business that has been in progress must be greater than the monthly installments that must be paid to the bank (net income per month after tax> installments per month). Ideally, the average net income for the last 12 months should be at least 2x more than the monthly repayments you have to pay to the bank. Of course, this also must be accompanied by the assumption that the business you are running is not likely to get worse in the next few years.
Fees and Other Costs
When applying for a KTA to the bank, there is usually a provision fee (in a simpler language, called an administrative fee). Find out if a bank that is willing to provide loans for you will ask for fees and other costs to be paid in advance. If these costs must be paid in advance, then you also must carefully recalculate, how much the remaining loan you can get after deducting these costs.