Pitfalls to avoid when borrowing money for business

It is usually regarded in accounting as assets owed, and it is created when a creditor agrees to lend a sum or assets to a debtor.

A debt can either be secured, if it is collaterised or unsecured, where no collateral is available and it allows individuals and businesses to engage in transactions that they would, ordinarily, not able to do. For instance, while corporate firms in industrialised countries use it to expand their operations, it is, often times, used by individuals to purchase houses, cars and many other valuables.

A Chartered Accountant, Mr Afeez Balogun says, “By regularly reviewing his financials, an entrepreneur would be able to make accurate financial forecasts and develop a long-term financial plan for his business. All of these would enable him to borrow wisely.”An entrepreneur should always match the type of loan to the business purpose. Balogun added, “If you need to finance commercial real estate, for example, you would not take out a business loan with a 12-month term.

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Our borrowing still at 19% to GDP – Finance minister – Daily TrustThe Minister of Finance, Mrs. Zainab Ahmed, has assured that Nigeria’s borrowing still remains healthy at 19 per cent to the Gross Domestic Product (GDP); which is low compared to Ghana, Brazil, South Africa, Egypt and Angola. In a statement, her Special Adviser on Media and Communication, Mr. Paul Ella Abechi, also said the minister … So what if our borrowing is lower than those countries u mentioned, most we borrow equal. See me see wahala. Collected depth na gud thing Borrowing to create wealth or to consume wealth?
Source: Daily Trust - 🏆 13. / 51 Read more »