There is a myth that hiring credit is bad for businesses. We think so because it may seem like a lack of financial organization, no profit or even an action contrary to that of an investing company.
The great truth is that most entrepreneurs compare corporate credit with individual credit, but these are two very different subjects.
Personal credit usually anticipates a need or covers an emergency expense, that is, the payment comes from income from the person’s earnings and will not bring about an immediate growth of that gain.
When we talk about loans for corporations, we can classify them as credit healthy and unhealthy credit
Unhealthy credit is related to the search for resources to cover “holes” that are constantly growing, fixed costs that are not reduced, that is, a credit that will not bring a positive return to the company.
In Brazil, the situation is a bit more complicated, since most of the credit options offered in the market by large financial institutions do not contribute to the company’s sustainable growth. On the contrary, by the high rate of interest, they end up putting the company in an even worse situation. A classic example is the use of the “Overdraft”, which although useful in an emergency, can present high rates and end up increasing even more the company’s debt.
Already healthy credit is one that brings growth to the business
It is self-sustaining from the operational point of view, that is, if one pays with the very growth of the operation. It works very well between paying suppliers and receiving customers, for example. The lack of own resources can slow the pace and even stop the operation for lack of cash and recurring receipts. This is a problem? Not! It is something that can happen, because there is merchandise already sold / billed and for giving a deadline to the customer, there has not yet been receipt. Picking up a credit (tailored for that moment) can keep the operation at the current level and leverage the growth of your business.
Companies that have an innovative or scarce service to the market, industry or region often need to protect themselves from emerging competitors, growing at extremely high and sustainable levels. In addition to using some marketing strategies and yielding deadlines for its customers, this company must “mark its territory” and increase its stocks or its productivity, buy new machines and more raw materials or even increase its staff in its services. This is another good reason to get a loan, because it will help your working capital and expand the entire operation, opening up possibilities to finance growth in a sustainable way.
At other times, companies already use third-party working capital, have expansion financing, and look at their finances and realize that their costs are steady and their operating expenses are controlled, but their payment for banking services is at an all-time high. expensive lines and all your payment is in the short term. We have one more reason to take credit: to change the debt to more economical lines or change this profile from short to long term (depending on the case it may be the two).
In general, these are the most common reasons, and there are others. But what the entrepreneur needs to keep in mind is that credit will never be bad if within your planning he can get paid through the investment made. This is what a healthy credit differs from another type of credit: the end result is good financial health to foster the growth of the entire company.
Nowadays there are several options on the market, but be careful! Hiring without planning and with high interest rates can be a maze with no way out. Many micro and small businesses have sought a solution in digital credit fintechs, since the main advantage of these online platforms is that they are less bureaucratic, transparent and release credit faster than banks and financial institutions.
This is the case of NEXOOS, a platform that allows companies to set up their own credit structure with the best fit in their cash flow, through collaborative loans : a financing modality that democratizes this process, thanks to the absence of an intermediary (such as the bank) between the parties and results in the lowest interest rates on the market.