BY JALUUM HERBERTS LUWIZZA
Loans, loans, loans!
We have all heard these scary things and stories about them. We all have a friend who has advised us never to consider taking one or a friend that has sworn never to ever take one again. Loans are one of quickest sources of capital for business start-up and growth and can go a long way in changing the fortunes of your business if handled well.
Yet the stories of pain are like the weather pattern of loan taking. Why? The reason most people never get the most out of loans is because they don’t think through the loan acquisition process with proper clarity. Questions like, ‘Do I really need a loan? How much exactly do I need? Is this the cheapest source of debt I can come across? How am I going to pay the loan? What payment plan do I have? What if that plan falls flat, what’s plan B? What credit option works best? Should I take a long term or short term loan?’
Companies Rise or Fall on How Well They Renew Their LeadersVery few people ask themselves these questions so they go after a loan without clear answers to some of the most pertinent questions regarding debt acquisition forgetting this is money you have to pay back with interest. I spoke with Mrs. Martha Kalema, a portfolio manager at Bank of Uganda, to understand the things a business owner should look out for before they go for a loan and here are some the pertinent things you may want to think about before you take that loan.
Understand the purpose of the loan
Why are you taking this loan? Is it for renovation and refurbishment, staffing or expansion? Failing to specify what you exactly need the loan for may see you misusing the money Martha says.
Work out the loan amount
“This is another important thing to take into consideration,
