How To Stay In Control Of Your Business Despite Taking A Loan

A business is an emotional prospect for its owners. Having given their time, their effort and all of their energy to grow it, the prospect of it failing can be devastating to some. Entrepreneurs are by far some of the most diligent workers around and they are doing everything they can to make sure that their business doesn’t fail.

While some businesses are lucky to have investors who will make sure that the business has all it needs to function independently, there are plenty of instances when VCs or friends and family often turn hostile when a business isn’t making a profit for them. In these cases, it can be very trying for a business owner.

A business usually involves the personal finances of a business owner. Now, one can ensure that their personal finances are secure by means of diversifying their portfolio and using HB Swiss like bots to take care of their investments. Or they can go the traditional route.

Now, when a business owner seeks an investment (a la Shark Tank) or a loan from a financial institution, there is usually some equity at stake. And in these instances, it can seem like you are losing control of your creation. There are, however, ways out of this. Let’s find out.

  • Don’t go solo. Just because it is cheaper, that doesn’t mean you should be the only player in the start-up and growth of a business. Going solo can also mean your credit scores will take a hit. So, beware of this.
  • Separate your business from your personal finances. The simplest option “Limited Company” status.
  • Read the fine print. Oftentimes, one can be so eager to get a loan, that the fine print is overlooked, and come bankruptcy, all hell breaks loose. Going over the fine print is in your best interests.
  • Get insurance. A D&O is the best way to circumvent the troubles that arise in the case of dishonored checks, insolvent trading, defamation
  • Venture capitalists are a good bet – those entrepreneurs on Shark Tank have got it right! Any loss is borne by the investor since they hold an equity in the company thanks to their investment. The burned on you is reduced.
  • Crowdfunding is the new VC! Raise enough funds for your business (and more depending on how successful/viral your pitch is) online. It will help you detach your personal finances from the initial investment stages.