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The future of every good business or opportunity can be determined by the applied tactics. When talking of business growth or expansion it always calls for the needed strategy to bring in more firepower.

Of course I am talking about finances here. I talked about yesterday how the savings contributions group that is mostly practice does not help in going a long way. Yes, although it helps those it helps. You can take a read here, so you can also have your own summary.

First comes ideas as the basis of business, second come money for a test run and finally is ‘the enough money’ stage. This is where everything goes big. Nevertheless, when targeting enough money be also very aware of ‘enough time’ in the process.

Many currently have been wrecked financial credit scores. It was one of such situations where one reputable figure in our country condemned the loan apps. I mean, their charges are outrageous.

Many currently are in the state of depression because they have to pay a high rate loan in a very short period of time. I have seen such situations in which a loan app charges 1% daily for 21 days.

I mean, what much do you expect someone to do in the space of two weeks and return both capital and interest. This has become a new opportunity for those ahead of the financial curve to milk those who are beneath.

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The big flaw here is that they are trying to make people gamblers. A good entrepreneur knows there is really nothing much to gain in a 30 days loan with 20% interest rate coupled also with the loan capital. How do you restrategize in case one bolt goes loose. Adding to that, your credit score is at big risk.

My advice here is, when trying to expand a business, don't take a quick loan. You need enough breathing space to check how efficient your flywheels can be with greater load.

Most especially, when your line of business has to do with sinking everything first. What do I mean here? Let's say you got a N1 million loan for three months to return N1.3 million. Noting too, you will be paying it out thrice (some parts each month) instead of paying everything at the end of the three months interval.

So what did you do with the money? Ok, you went and rented a new business apartment to have a branch. Nothing bad about that. ALL the money has been spent on rent and setting up the premises and you know you will now have to gradually wait to see a turnover for your service/product in that environment.

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It can take 3 to 6 months to even see consistency in service demand. note, you have a compulsory debt of around N430K to be getting out for the next respective three months.

Adding to that, you have staff to pay at the end of the month, expenses to make daily that are likely not to yield instant results. Remember, you are new to the environment. The chances of meeting up is very choking. You are likely to lose sense of balance in the process.

All the gains made from the first office will be entirely for expenses. How do you cope? The next solution may be to enter into another of such a similar loan in the second month if you are able to get the first month out. We all know, your business name and reputation is at stake here.

Ok, let's say you got another, so it means you have added another minus to the current minus. Surprising, before you get out of the entire scenario you may find out you spent more than half a million in interest. It is more like you opening up a business in your name and paying the profit to someone else.

To conclude, let me add, anything that does not allow an entrepreneur to think and exercise the long term privileges is more of a trap. One needs to be very careful when taking loans for business. As I earlier said, the current loan interest charged rate in our country is very high.

It has been something citizens have complained to the government about. There is yet to be positive feedback as everything still remains high. As we speak, this Christmas season, many will be falling into that trap again. Worse of all is taking loans for consumption.

Posted Using INLEO