Why Borrowing Money Is Better Than Giving Up Equity- Top 5 Reasons

By Ashutosh Jha → Last Updated on Monday, June 17, 2019
Financial matters can be a sensitive subject for many people these days. This is completely understandable because it has been drilled into you that there is no such thing as good debt. In fact, when most people talk about owing money these days they are usually talking about mortgages and the national deficit. The truth of the matter is that this is not always the case. This is especially true when it comes to business matters or equity. You are always far better to borrow money than to give up valuable equity. And, below you are going to learn why.

Debt Is Less Expensive

When it comes to the long-term side of things it is always much more advisable to borrow money than to just give away valuable equity. This is because when you give up equity, you are literally giving up a portion of your business forever. This is something that no business owner wants to do, especially when they are just starting out.

Reduces Tax Expenses

Tax season is always a rough time for many businesses. Not only do you have to scramble to get all your records together, but you are probably going to end up paying in money. No one wants to have to pay in money at the end of the year, but this is just a simple part of doing business. That being said taking out a loan could help reduce this burden. Most business owners aren’t aware of the fact that they can use the interest rates they are paying on the loan as a tax deduction.

Build Your Discipline

No business or individual wants to be in debt, but sometimes this is something that is unavoidable. The key to this is to take this as a learning experience. Learning to borrow, spend, and invest wisely will only help you with future business ventures. It is true that no one would take on debt just to increase their discipline, but being in debt could be seen as a positive asset. When you learn to optimize the dollar or stretch your budget, you are going to put your business in a prime position to end the year with a profit.

You Only Pay Back What You Borrow Plus Interest

One of the best things about money borrowed from lenders like låna pengar utan inkomst is that you only have to worry about paying back what you borrowed plus the interest. This means that if your company is successful, you will be in a position to reap a larger portion of the rewards. This would not be the case if you sold out various stock options or other equity.

Everything Can Be Done In House

Another excellent thing about borrowing money is that you do not have to consult other shareholders, partners, or board members. This would not be the case with equity. You would have to consult owning members of the business to get approval for the loan. This not only makes business owners feel like they are not in control of their own business, but it could delay plans that need to be acted upon in a moment’s notice.
Ashutosh Jha

Ashutosh Jha is a professional blogger, Blog and IT Consultant. He writes about Blogging, SEO, Making Money, Internet Marketing and Web Design.
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