Inflation is a fact of life. We all know prices go up over time, and that’s never been more evident than it is right now. After facing COVID shutdowns, supply chain issues, and employee shortages, small business owners are currently coping with inflation.
The cost of goods and services is going up, making it harder for businesses to make a profit. And that has many business owners wondering if they should take out a business loan to combat inflation.
The answer is not a simple one. On the plus side, a loan can give you the cash you need to buy inventory or make other necessary purchases. And if you’re able to get a low interest rate, the loan can be an affordable way to finance your business. On the downside, taking out a loan can put your business at risk if you’re unable to make the payments. And if inflation continues to rise, you could end up paying back more than you borrowed.
So, what’s the right decision for your business? Only you can answer that question. But here are a few things to consider.
How much inflation are you facing? If prices have only gone up a little, you may be able to absorb the cost without taking out a loan. However, prices are rising rapidly, and a loan may be your best option.
How much cash do you have on hand? If you have enough cash to cover the increased costs, you may not need a loan. But if you’re running short on cash, a loan can give you the funds you need to keep your business running.
What are your other alternatives? You may be able to get a line of credit from your bank or negotiate better terms with your suppliers. There are various options available, so be sure to explore all of them before deciding.
Making the decision to take out a business loan is never easy. By considering the factors above, you can make the best decision for your business. If you’re still not sure, we can help.
Contact Boris Benic and Associates today. We’ll be happy to answer any questions you have and help you find the best solution for your business.