Being In The Black Isn't Always A Dark Place

Businesses assume that debt is terrible. Paying extra on interest-only chips away at a small budget, and the consequence for failing to pay on time is inaccessibility. Only entrepreneurs or companies with bad credit scores understand how difficult it is to find revenue streams when you’ve been blackballed. 

So, the idea that being in the black isn’t a bad thing is almost laughable. It goes against everything you’ve believed in since you decided to go into business. However, the reality is that plenty of successful individuals and companies around the world are indebted to their arrears.

Continue reading to find out why.

It’s Leverage For Growth

One feature that you might not take advantage of is leveraging debt for corporate expansion. The beauty of a flexible corporate investment is that it takes a relatively small amount and transforms it into a considerable sum. Suddenly, the budget is two, three, four, or even five times bigger than before. And, it’s money that you can use to expand into new markets and raise awareness of the brand. Do it correctly and your ROI will be more than enough to pay off the monthly interest. You could pay off the entire loan instead.

Assets Reduce Tax Bills

It’s not interest rates that cause companies to waste resources regularly. Instead, it’s the government, an establishment that demands a chunk of your earning no matter the circumstances. The average is 30%, but that depends on different factors such as your location and the business’s formation. Still, one-fifth is a sizable fraction. Thankfully, debt is a legal and responsible way to reduce the amount of tax you owe yearly. Why? It’s because you can use the cash to invest in assets that aren’t taxable. Yes, they exist, and they might save you a small fortune.

Debt Is Tax-Deductible

Well, a business loan repayment isn’t eligible for tax deductions as a whole. Instead, the interest part of your loan is. There are specifics that you should research before signing on the dotted line, and you can learn more about them by clicking here. Yet, the overall message is that interest accrued by business and personal loans are deductible. Of course, the money has to be used in a corporate capacity, or else you run the risk of a fine or jail sentence. Do it correctly, though and the company’s tax bill will be even lower thanks to your arrears.

Consolidation Makes It Easy To Manage

If you feel as if you can’t take advantage of debt because you aren’t organised, a consolidation loan will cover the bases. Essentially, it’s one loan that takes care of all the interest you owe. Therefore, there’s no need to keep tabs on your arrears, other than to see how much is due and how much is left. With this type of loan, you’ll be able to keep your debt levels in check and stop them spiralling out of control.

Debt can increase your spending power and reduce tax, all while being easy to manage. So, is it still as dark as you imagine?