Take a minute and imagine that you just purchased a new business in February of 2020. When you did it, you choose to finance the business with a five-year note instead of a ten-year note. You didn’t like the idea of having debt -and you wanted to get it over with. You decided to stomach the bigger payments.
And then – the unexpected happened – Covid hit and your business changed for the worse in unimaginable ways. You wished you had made a different financing decision.
Financing strategy is always about playing offense and defense. And that’s why I often encourage entrepreneurs to think about using the SBA – to buy themselves the flexibility of 10-year money – especially with no pre-payment penalty.