Loan Money Management

Entrepreneurs to expand their business sometimes seek additional capital through loans, and in business it is commonplace.

One way is to borrow from the bank. Or through other parties such as relatives, friends, community. However, sometimes not all loans can be managed according to expectations so that the business runs backwards and even collapses due to mismanagement and unexpected external situations. 

Moreover, if it is a bank loan, there is a lot of risk from the loan which if it cannot be completed it will actually lead to deeper difficulties. 

Among them are late fees, the possibility of confiscation of company assets, and the inclusion of the company's name on a banking black list which will make it difficult to obtain loans in the future.

To avoid this, there are several ways to manage bank loans so that the business can grow and the debt remains paid off. Let's see the following review

Plan Carefully

Before deciding to borrow money from the bank, you should first determine a business progress plan. You have to plan where the funds will be channeled, whether to add production equipment, financing promotions, renovations, opening branches or expanding areas.

By having a mature plan, the business will run more smoothly and the loan money will be used as needed. Plan carefully whether it is necessary or can still delay the fulfillment of that need.

Follow the Plan

When someone receives a large amount of money from a bank loan, sometimes there will be a desire to use the funds outside of business purposes. The thought arose that buying this was still enough. This is of course not quite right. If you are in debt for business, then never give in to those desires.

Stick to the predetermined plan. Do not touch any of these funds outside of the budget plan that was made, so that the loan money will not run out without any business progress.

Provide a Special Fund

Dare to take a loan from the bank, it also means having the courage to pay in installments every month along with the interest. However, pay the installments in an orderly manner if you don't want to be burdened with fines.  

Since the beginning of getting a loan, it has been prepared for the next 3 months. it's better to get

used to having a special fund to pay installments that can be taken from operating profits. Even if the profit you get exceeds the target, you can set it aside for the next installment as a special reserve fund that will be useful when the business runs into a deficit.

Make Profit As Capital

Even though you have to use business profits to pay off debt, you still have to increase capital with these profits. Think of yourself as an employee in a company who gets paid every month.

When the loan at the bank has not been completed, then do not take profit first, take the salary as the owner only. Profits can only be used for business purposes. Be patient for a moment.

Thus gradually the initial capital you invest will increase as the business goes on. Businesses that run more smoothly will make it easier to pay bank loans.

Keep Financial Records

An indispensable way of managing bank loans is to keep company financial records. You need to write down all your income, expenses, and debts on the note.

Each installment that has been paid also needs to be written in detail because it can facilitate the calculation of the company's cash flow. This way, you can easily see how much the company is progressing and how much debt you still have to pay.

Even if the company's finances decline, you can quickly find out and can make the most appropriate decisions based on these financial records.

The need for company financial records can be done quickly by using special accounting software such as Journals. Journal is an online accounting software that has various features for financial recording.

Try to always be disciplined and responsible

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