No matter what industry you’re part of, one of the biggest challenges you’ll run into as an entrepreneur is having enough money to sustain your business. It’s almost always neither cheap nor easy to launch a business, and even in your earliest days, you’ll likely be worried about having enough working capital to purchase supplies, pay your employees, and take care of emergencies, among others.

Given your worries about your current finances, the idea of borrowing money from someone else might scare you. Perhaps you’re anxious about falling into even greater debt when it’s time to pay the money back with interest. Maybe your fear stems from accidentally skipping a repayment deadline and incurring a steep penalty. It’s also not uncommon for Filipino business owners to shy away from taking on debt, as it may seem like they’re being dependent on others and unable to stand on their own feet. But truth be told, this fear of debt can keep you from making significant improvements to the way you do business—and, in the long run, cause you to miss out on excellent business opportunities.

In running your own foodservice business, remember that it’s okay to look for financing options from credible lenders. In fact, taking on business debt in the form of a low-interest business loan may be one of the best decisions you’ll ever make for your business’s bottom line.

Here’s a short guide on why you shouldn’t be unnecessarily fearful of taking on business debt and how you can use easy, low-interest financing solutions like cash advances through GrabFinance’s Quick Cash program to your advantage.

Why You Shouldn’t Be Scared to Take Out a Loan

Many business owners associate being in debt with losing money, having to meet burdensome obligations from creditors, or having to endure inconveniences like waiting a long time for a loan to be approved. However, the right loan arrangement can actually be quite beneficial to a business in terms of both profitability and operational efficiency.

A fair and manageable business debt can achieve the following for your business:

The money you receive from your creditor can help you deal with other sources of financial stress, such as cash crunches or emergencies related to natural disasters, which are all too common in the Philippines. Rather than letting these stresses pile up unattended, you can use the money you’ve borrowed as a financial cushion and address these problems head-on before they get worse. If you use it towards improving your financial planning practices, business debt is definitely worth taking on.  

If all goes well and you get approved for the financing solution of your choice, you’ll have more liquid cash on hand to take care of your everyday business needs. This also means that you can afford to take on some healthy risks and be more innovative in the way you do business. Change may be just what your business needs in order to become more profitable, and your debt may actually empower you to say yes to necessary changes in terms of your product offerings, manpower, and customer reach.

In the best-case scenario, borrowing money can help you make more money. When you have enough cash on hand to keep your business running and to meet your customers’ needs, you’ll be able to grow your market and earn the loyalty of your customers. Both of these outcomes will increase your revenues and ensure that your business stays viable and profitable for the longest possible time.

How Can You Leverage Your Debt to Improve Your Business?

 To make the best of the debt you take on for your business, you should have a plan for how to spend your funds. Below are the most practical applications for the money you’ll borrow through a business loan:

The first thing you can do with your funds is make sure that your suppliers for both raw materials and finished products are paid on time. This will prevent problems in the supply chain that could otherwise affect your business operations. If you run a capital-intensive business that relies heavily on good supply chain management, for example a food and beverage business via GrabFood, make this one of your top priorities for the money you’ll borrow.

Another thing you can do with your financing solution is bolster your current manpower. The money you take out through a business loan can be used to pay your employees’ salaries on time and to hire new recruits to staff your business. Your workforce is essential to your business’s success, and greater employee satisfaction with regard to compensation will translate into a stronger business performance. 

Your funds can also go towards paying for expenses such as rent and utility bills like those for electricity, water, and internet. Falling behind on any of these could cause business disruption and keep you from maximizing your earning potential. Knowing that, it would be good to allot an appropriate amount of your funds to rent and utilities.

Again, innovation is good for any business, and the business debt you take on may allow you to be more creative about getting your brand out there. You can definitely apportion some of your funds towards a new marketing and promotion campaign, such as a GrabAds campaign to reach thousands of active Grab users. 

You may have been planning to buy new kitchen hardware or upgrade your current business tech stack for some time. Getting approved for financing will finally allow you to make good on those decisions. Use the money that you’re borrowing from your creditor to invest in new equipment like computers, cash registers, and mobile payment devices or to upgrade to cloud-driven enterprise resource planning (ERP) software. 

It takes money, time, and effort to develop new products and to introduce them to the public. Taking out a loan can immediately cover the first of these needs, which means you’ll have an easier time taking care of the other two. By leveraging debt to cover much of the expenses related to product development and launching, you’ll be able to entice both old and new customers to purchase from your business, and you’ll earn more as a result.

Finally, business debt can also cover expenses related to expanding your enterprise to other markets outside the ones you already operate in. Your funds can go towards opening new restaurant branches in other locations, for example, or towards developing an online store to supplement your business’s brick-and-mortar operations. If you play your cards right, your new revenue streams will allow you to pay back your debt with ease and take further steps to grow your business.

Tips on Making the Best of Business Debt

Suffice to say, there’s a lot you can do to improve your business with the money you get from a business loan or other type of financing arrangement. That said, you should also do your part to manage your debt responsibly and to find an arrangement that truly aligns with your enterprise’s current needs.

Remember the following when applying for a financing solution like a business loan:

This may seem obvious, but it’s important enough to bear repeating: don’t borrow money if you’re not confident that you can pay it back. If this is your first time to look for a business loan, go for an option that allows you to borrow smaller sums at a low interest rate. When you’ve gained enough experience at managing and paying off your loan, you can eventually apply for one that involves a larger amount of money. Make it your goal to prove your trustworthiness to both your creditor and the other people involved in your business.

It’s an exciting time to be an owner of a small- or medium-sized enterprise (SME) because there are so many reasonable options for financing. That said, be sure to compare your options in terms of the amount you can borrow, the time it will take for the loan to reach maturity, and the amount of interest you’ll have to pay. Being thorough about the options you have will ensure you the smoothest and most manageable experience.

Even before you get approved for financing, it helps to have a plan for how exactly you’ll spend the money you’ll borrow. Decide on your priorities and do your best to be faithful to your financial goals.

Lastly, for every business debt you take on, make a commitment to be responsible about your money management. Be conscientious about your payment deadlines, keep your receipts, and make sure your business accounting system is always in order. In addition to providing you with more money to run your business, your debt should also help you become a smarter, more resourceful, and more responsible entrepreneur—and that, among other things, will pave the way for your business’s success.

GrabFinance: Providing Financing Solutions That Empower Filipino Business Owners

If you’re on the lookout for financing solutions to help you fuel and grow your business, we have great news for you. Grab has recently launched GrabFinace’s Quick Cash program, an exciting business financing option that is tailor-made for SMEs in the Philippines. This option is currently available to Grab merchant-partners who have been on the platform for at least six (6) months.

GrabFood entrepreneurs can get approved for a cash advance of between PHP 15,000 and PHP 300,000 with an interest rate of as low as 1.75%. It only takes between 5 and 7 days to process cash advance applications, and successful applicants can count on a swift disbursal via GrabPay.

GrabFinance’s Quick Cash program also eases the burden on borrowers by making micro-deductions on a daily basis as opposed to requiring huge repayment amounts all at once. Thanks to the cash advance program’s reasonable interest rate and convenient repayment scheme, you’ll be less worried about managing your money and more excited about strengthening your business. Check if you’re eligible to apply for a cash advance with GrabFinance’s Quick Cash program today!