Questions to Ask Before Signing a Business Loan

Are you thinking of taking out a loan to buy new machinery or additional inventory for your business? Before you sign that loan document or credit application, consider the following questions.

What's the true cost of borrowing? The interest rate on your business loan may be variable, fluctuating over the life of your loan. Calculate the impact of potentially higher future payments on your ability to pay other debt, such as amounts you owe your vendors. Include fees in your assessment. Your lender may ask for loan origination fees, application fees, administrative fees, and fees for gathering financial information about your company. Consider intangible costs too, including how long you have to wait before the loan is finalized and what opportunities you're missing while waiting.

How will the loan be secured? Your lender will most likely require you to provide collateral, meaning you'll be asked to pledge assets as security to ensure loan repayment. If you're unable to pay the loan back, you run the risk of losing those assets. In some cases, you can use your business inventory or accounts receivable as collateral. Keep in mind those assets will be unavailable for other business borrowing. Alternatively, depending on the size of your business, you may have to use personal assets, such as your house or cash savings, as security. Make sure you have assessed the risk of loss before finalizing the loan.

Can you wait to make the purchase? Saving for purchases may be old- fashioned, but you'll be investing in your business, with no lender to repay and no interest expense or other fees. In addition, you retain control of all your assets. Here again, opportunity cost will play a role in your decision, as you may miss out on taking advantage of good deals or possibilities for business growth.

When you're ready to evaluate your financing options, give us a call. We can help you make the right choice.

 

Call us at (219) 769-3616 with your questions, or email them to tlynch@swartz-retson.com.

Data Security is an Essential Part of Customer Care

Security breaches of confidential data capture the global news headlines on a daily basis. Identity theft has become so commonplace that credit card companies and banks market their protection efforts as free services to their customers. The IRS is at risk too, with impersonators using the fear and authority of the government to prey on victims. It's a scary world out there with the amount of personal data available to criminals looking to take advantage. The world might be scary closer to home too. Have you considered how much personal customer data your business handles? Are you confident in the security measures you have in place?

If you're just beginning a data security review of your company, start by understanding how you may be unintentionally exposing customer data. Then protect yourself by implementing security procedures. Here are questions to consider.

• Where do you access company email? At the airport, on your phone, or via the free internet at the local café? Make sure your phone and your internet connection are both secure.
• Have you taken a work file home with you? Was the file a printed hardcopy, on a USB drive, or did you send it to a personal email account? Don't make data theft easy for the bad guys.
• Do you upload data to a free cloud storage account? Know your vendors and their security procedures.
• Are all of your passwords unique or do you duplicate the same password on multiple accounts? Use a password locker.
• Do you secure your hardcopy data? Printouts can also be a vulnerable access point for identity theft. Best practices include strong procedures for document destruction, retention, and physical security.
  No matter the type of business you operate, acting wisely to protect sensitive data is an essential part of customer care. Don't let your company become the next headline.