To American business owners getting a loan — or worse needing a loan — can be uncomfortable. But a loan is more than just money lent. A loan represents the confidence an institution has in you to get things done.
Entrepreneurs live for the hustle and aim to moderate their risk. However, the additional benefits of getting a significant loan are one tool that anyone with a growing company should examine. Potential advantages include:
Favorable tax treatment
Regular payments to a loan can make a dent in your year-end tax liability. The amount of tax savings and the particular deductions or exclusions you’ll have available depend on your capital structure and your choice of entity. However, many a business owner has reaped significant tax benefits from their loan payment structures.
When the bank gives you a loan, it invests in you. The best outcome for everyone in that situation is for you to succeed. Your loan officer is often intimately familiar with the business ecosystem of the community and is a great place to start if you are looking to create a partnership with another business. However, please keep in mind that banks and their employees are under extremely stringent ethical guidelines and regulations. They may not be able to tell you everything you want to know, but you might get pointed in the right direction.
It’s possible you could afford your next business step or expansion without any help whatsoever. You have patience and a solid business model, and what is a little extra time for a sound decision? However, there is something to be said for moving quickly to take advantage of the business need you see. With a little help you could corner a market that no one else has noticed was even there.
Taking risks and getting results is a part of business that you can’t really avoid. However, when you know the people and institutions of your community believe in you, then you can be much more confident when making the decisive actions you know are right.