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Here’s how to use a loan for growth and not for debt

Loans are necessary for every business. But when loans aren’t used appropriately, you fall into the unending debt pitfall whereby your business remains small, and you keep on amassing debts. When this happens, you are stuck at a point with a lack of funds or breathing space for expansion because you are choked up with debts.

Camino Financial business loan calculator can help you calculate the various parameters involved in your loan and the total/actual cost of the loan. This way, you can plan strategically and put the loan to good use growing your business and not struggling to keep up with debt servicing and repayment.

Have an extensive long-term business plan before applying for loans

Yes, a business plan is good. But a long-term business plan is even better. A long-term business plan finetunes your company’s vision and helps you to plan strategically with every money you receive. It prevents you from spending too much money or business loans on temporary problems. Now you can focus on finding permanent, long-lasting solutions that will help you grow and budget money appropriately. It also helps to weed out the unnecessary chaff and helps to justify the need for a loan or not.

Calculate the actual cost of a loan

Loans are usually more expensive than what they look like on the surface. They typically come with additional charges and other things that add to the cost of the loan. You need a business loan calculator to determine the actual cost of a loan and how favorable the terms of the loan are or not. Furthermore, the loan calculator will show you your monthly payment amounts, and you’ll be able to predetermine if your business’s monthly cash flow supports this payment.

Have an external consultant evaluate your business

The problem with running your business on your own as a sole proprietor is that you sleep with your business, eat with your business and even run it on weekends. You live with your business and think about it a lot. This makes it hard for you to think out of the box and see things critically with an unbiased, analytical mind.

To see things from another perspective, you need to hire a consultant who will evaluate your business critically and point out useful tips that can help you improve your loan usage and services. The expert doesn’t have his/her neck-deep in the business, so they can help you with ideas that can bring you much-needed respite.

Don’t borrow too little money when you need a lot of money to expand.

This advice applies both ways. Don’t borrow too little money when you need a lot of money to expand, and don’t borrow too much money when you may not need more than a little cash advance to offset a temporary cash-flow issue. When you borrow too little money for an expansion project, the project gets stuck, especially if unexpected expenses pop up. It will lead to you paying a lot of money in monthly repayments while not accomplishing anything with the loan you took. You end up in a lose-lose situation with no benefit from obtaining the loan.

Go over proposed expenditure properly and make allowances for extra expenses. Projects often overshoot their budgets, and you need to prepare for this.


Obtaining a business loan and spending the business loan wisely are two different things. As a business owner, you must be calculative and savvy to use your loans to expand your business and not just pay off the monthly payments. Use the business loan calculator, external consultant and follow the tips mentioned in this article.

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