Kick ass insights: no bank loan is free

Kick ass insights: no bank loan is free

E2. Managing loans in a slowed down economic environment as is today -Should one/a business take a loan today?

“No loan is free. The costs are in your loan somewhere. So, avoid loans, if you can!”

1. A loan is one method of financing. Before taking the loan, have you considered the other options like equity investor, partnerships and creditor financing?
2. Imagine if Uchumi had got a loan for the stock it had, with accumulated interest, the company would have been in a very bad state
3. Build your business on a strong foundation. Do not rush to sign loan agreements. Understand the terms fully.

-If yes what kind of a loan should it be? Etc

1. Debt financing is good if the returns of the business are higher than the interest rate. When business slows down, you find the sales are low, and return on capital employed is lower than the interest cost. That is the cause of the problem.
2. Anticipate your business and discuss with the banker before your position worsens.
3. If you have a loan, keep your bank involved in your challenges. Renegotiate better terms. Banks are happy with transparent clients.

About M. B. Mugisa

Mustapha Barnabas Mugisa is one of those rare people who provides business consulting and advisory to professionals and corporate entities who demand the very best. He is a prolific speaker and governance (strategy and risk) expert. His speaking involves making key notes at major conferences and business events on both technical subjects and leadership skills. A change agent and motivational speaker. Mustapha provides tools and proven methodologies to remarkable results through making people appreciate change. Visit Mustapha's LinkedIn profile to know more. Mustapha is the architect of #WinningMindset Leadership and #WinningTheGame strategy approach that combines Harvard Business strategy Playing To Win, with the Blue Ocean Strategy and Balanced Score Card to deliver a strategy that is easy to execute and monitor. Visit for special insights to improve your condition. Are you too good to be great?

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