Why borrow for business?

There’s a simple phrase summed up as OPM. The best way to increase your own profits is to use the “OPM” rule – “other people’s money.”

If your business is starting out or looking to expand, you should refrain from using your own short-term profits to buy long-term assets. According to the official record, this is the most common reason for small business failure. The best way to increase your own profits is to use the “OPM” rule – “other people’s money.” Getting investors in the private sector is difficult, and you may have to sell shares of your business to attract the funding. A loan does not require you to give up shares, and you pay off a loan over time at a fixed cost, that also lets you plan ahead.