I've been seeing some interesting changes in my business financing lately! My earnings have increased by 57%, and while one of my recent offers at 91% paid off, it ended up being nearly five times my usual amount, which made sense for my sales. I decided to take that offer because I often feel nervous about finances during the winter months. Even though I've had a line of credit with my Credit Union since 2018 at a good rate, I was cautious and wanted to be extra safe by scaling back my borrowing.
Now, I received an offer at 69%, and I have chosen to pass. I just can't justify taking on a loan with such a high rollover of over 30%. I completely understand that everyone has different needs, and I don't judge anyone running their own business. Things can go wrong—like the oven hood just broke! The air conditioner just died—whatever emergency it is.
I’ve noticed that many companies, like Square and other point-of-sale systems, are in similar situations. We've all become accustomed to getting offers with just about guaranteed offers around 70-75%, but that trend has shifted over the past year and a half. When I took that 91% offer, I had the option to lower my payment percentage while still getting a substantial amount of funding, which allowed me to reinvest in my business for growth. And put half in savings at 4.75% so that brings that loan down to roughly 5% and I am ok with that!
I also connect with others on social media platforms like Reddit, where various business owners share similar experiences and concerns. While sales representatives may promise a lot, it’s essential to read the fine print in their agreements. Typically, they expect you to build a good relationship and repayment history over six months to a year.
I’m not here to tell anyone how to manage their business; that’s a personal decision. However, I believe it's important to be honest and transparent. If I were in someone else's shoes, I'd appreciate being informed about the realities of borrowing and financing. Our moderators do a fantastic job of keeping us updated and clearly explaining why loan terms are changing. We often get comfortable with familiar patterns, and when things shift, it can be surprising.
Thanks for being supportive, and it's important to remember that there are no guarantees in business. All we can do is wait for the right opportunities or consider looking for other lending options if possible. I know our moderators are dedicated to helping us navigate these changes! It is clearly pinned above the “click here” section gives a very good explanation of why the percentage paid back for most (not all of course) has increased and that's for our benefit in the long run. More money in our pockets and less being rolled over.
