Debt and when it makes sense.
WHAT BORROWING IS FOR
Something that produces more than it costs.
WHAT EXAMPLES LOOK LIKE
Equipment that increases capacity Stock that will sell Bridging a known timing gap
WHAT IT IS NOT FOR
Covering losses Personal consumption Paying earlier debt, routinely
WHY THAT LAST ONE IS DANGEROUS
It is the pattern that ends badly, and it accelerates.
WHAT TO ESTABLISH BEFORE BORROWING
What it will produce How it will be repaid What happens if the plan does not work
WHAT TO CALCULATE
The total cost, not the monthly payment.
HOW
Payment multiplied by the number of payments, plus fees.
WHY
Monthly figures conceal the actual cost.
WHAT TO ESTABLISH ABOUT ANY LENDER
Whether they are licensed The total cost What security is required What happens on default Whether early repayment is permitted, and at what cost
WHAT TO BE CAUTIOUS OF
Very rapid approval with little assessment Access to your contacts or phone Rates expressed only per day or per week Pressure to decide
WHY ACCESS TO CONTACTS MATTERS
Some lenders use it to pressure borrowers through their relationships.
WHAT TO NEVER DO
Borrow personally to fund a business that cannot repay it.
WHAT TO READ
Everything, before signing.
WHAT TO KEEP
The agreement and every payment record.
