How do profit increases your ability of borrowing money?

[Shahid]

This is the most noteworthy of the following four points. When raising funds for your business, giving up equity is almost always more expensive in the long-run than taking on debt. Equity costs you a portion of your business, forever.

 

[Olubayo12]

Have you ever crossed this thing into your mind? Seems very ironic to hear right, but it is possible. Yes having the profit increases your ability to borrow money from possible investors. Debt lending allows a corporation to repay the money loaned with interest to the borrower. Debt funding for a small corporation usually involves a bank's borrowing of capital. Profitability of a business plays a major role in lending a bank money to the company.

Besides interest, the loan value and collateral of a business owner are deciding factors in the decisions on the loan. A business which cannot make profit is generally regarded as a risk of a lender's default.

What are your thoughts about this, is it still profitable ? Please share your thoughts.

Some companies especially loan companies normally requires company's financial statements before they can grant the loan you are requesting from them so if your company has been making profits in the past, they will easily grant the loan knowing that you will pay back without any problems

 

[Azhar119]

After you have developed a cash flow analysis and determined when your business will make profit, you may decide you need additional funding. Borrowing money is one of the most common sources of funding for a small business, but obtaining a loan isn’t always easy. Before you approach a lender for a loan, you will need to understand the factors the bank will use to evaluate your application. This page outlines some of the key factors a lender uses to analyze a potential borrower.

 

[Victor72]

There are many way profit can improve your ability in business, when you get more profit and your business begin to grow, you will have more abilities to borrow people money and also because of the quick turnaround in the business you want to even borrow more to people.

 

[tyrim88]

A business owner that knows what his financial record book says about his cash inflow and revenue accumulation,will have the confidence to take a grant from the bank to finance any aspect of his business,he would'nt have any fear of default payment,and the bank will be willing to grant such loan request,if their records of cash inflow has a good prospect.

 

[zahidhussain]

To increase profit get a loan from the bank is risky for you if you get the loan from bank and you income not increased you will face many challenge and difficult to return them.So it depend on you and not fever in you
[automerge]1614244149[/automerge]
To increase profit get a loan from the bank is risky for you if you get the loan from bank and you income not increased you will face many challenge and difficult to return them.So it depend on you and not fever in you

 

[gnasrullah53]

If you have a business and your work is increased with the passage of time and you have a good record of money in the bank then every bank trust you and give you loan easily.otherwise if someone has some property in good position then he borrow some loan easily

 

[tyrim88]

The financial records of any firm is very important,because when the firm wants to get a loan facility from a financial institution,their books will either deny them or aid them.If their income level is high,the bank would'nt have an issue to grant them a loan.

 

[Softdave]

A business with a good success record and speedy rate of growth with good financial records are liable to receive financial helps when it needs it based on the fact that they meet up to those factors that are profitable

 

[Sariana23]

You are right in the approach you describe in your thread. The more profits you have in the company, the higher the probability of getting investors, bank loans or private lenders. Since the above inspires confidence, the more profit there is the greater the possibility of repayment.

 

[Mawome]

It's very simple I tell you, but it depends on the type of business you are doing, there are some business that requires enough capital, and such business you can get your returns in Les than 24hours, if you are into that type of business then you can actually think of borrowing money for profit maximization.

 

[Samuel77]

Sometimes when you start up a business you found out that this business is very profitable and at this point in time you want to invest more and more, this can lead to borrowing

 

[Setho]

There are many banks and financial institutions that have different criteria for loaning out moneys. One which I know is the business performance loan where a business automatically qualifies to receive a percentage of their company value based on profits earned.

 

[Chibson]

Borrowing is sometimes good, especially for established businesses that has good monthly or yearly profit. But I wouldn't advise startups to take loans.

 

[Setfragil]

No lender will want to lend money or gives out loan to a business that does is not performing. Performing businesses are the ones that makes profits and grows accordingly. When a business makes profits that means the business is in good standing to apply for credit facilities or loan. Profits making is one of the determinants of loan.

 

[Shigobad20201]

Assuming for example you have a good business giving you some good amount of profit at the end of the day, it will be very easy for you to borrow money or take a loan to do any other things or to expand your business since it's very sure you know the amount of money you earn per day

Banks always gives out loan to your company when they know you makes profits on your business and you are prompt to pay back the loan with interest, because they believe your profit will help you pay your debt.

 

[Setho]

This applies to the rule that most banks and lending institutions apply . this is to ensure that they are only giving out money to business that is likely to bloom.

 

[Kunkun]

I think it is a good way to go. The business is making profits as it is, now wants to borrow more to capitalise, expand and grow even more, which would mean more profit. Any bank wouldn't think twice to borrow such business.

True because there has been indications of success, investors are not inclined to give out more money compared to when the business isn't doing well in the first place

 

[Fizzy_boi]

Definitely once profits can definitely allow and open an easier way for you to borrow more money and you definitely get to pay back at agreed time without the lender being doubtful.

 

[eLdavis]

If yours profits or financial activities are consistent it means you are capable of paying back the loan in no time. This fact give the bank or your creditors the assurance that you would pay back