When is the right time to apply for a loan?

Timing is key.

Everyone in business understands the importance of growth. Without growth the business is just not going anywhere. The only way to grow is to buy assets that generate money for your business. Whether you are in transport or in construction or a running a tree lopping business, whatever it may be buying assets will help you take your business to the next level.

Sometimes you do buy assets to help reduce your taxable income so come tax time you are in a position to reduce your profit and pay less tax. This will help you build your business more. But there is a fine line between paying less tax and showing enough profit to be able to buy more assets.

The question that we do need to ask ourselves is when is the right time to buy?

Most often than not it is when we have the need for that asset. It most likely is due to the increase of workload. By obtaining a contract or an increase of clients, it also can be due to hiring more staff. We do however need to be careful with growth because you don’t want to be in a position where you over commit yourself.

We need to work this out with our accountants of course to establish whether is it the right time to buy or not. Do a cashflow projection to show where your business will be in a year’s time so that you can buy that truck or piece of equipment now.

Sometimes you can easily work out that based on the income that this asset will bring in it makes a feasible option to buy it.

At RENI Financial Solutions, will work hand in hand with you as well to ensure that the cost of a loan works within your budget. We will let you know what you borrowing capacity is before applying for any loan.