When Should a Business NOT Take Out a Business Loan?
A good indicator that a business loan is not the right solution for a business is if a business is seeking a loan for expenses that it cannot cover, such as staff or overhead costs. If a business is not profitable and not in good health, and it requires additional cash just to stay afloat, that is typically a red flag when it comes to business financing.
Most lenders would look at businesses with positive cash flow that have recurring revenue and a steady track record as a prerequisite before issuing them a business loan.
