How Much Will a Loan Affect Your Profitability?

Meredith Wood

Meredith Wood

Editor-in-Chief at Fundera
Meredith Wood is the editor-in-chief at Fundera. She has specialized in financial advice for small business owners for almost a decade, and is sought out frequently for her expertise in small business lending. Meredith’s advice has appeared in the SBA, SCORE, Yahoo!, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, and more. Email: meredith@fundera.com.
Meredith Wood

Many of the businesses that come to Fundera for a small business loan are operating under the assumption that taking on this financing will help them increase revenues (whether by putting it into new marketing campaigns, buying a piece of equipment to up their output, and so on). It does take money to make money, so often a small business loan is what many businesses need to get to the next level. However, loans always come at a cost, and can often be expensive.

That being the case, if you are considering a loan, you need to sit down and see how the cost of this loan will affect your financials. If it is expensive, it could cut into your profitability. Calculate how much revenue you need to add to your business each year to ensure, even while paying off the loan, your business at minimum breaks even or even better, remains or becomes profitable. The best way to do this is with our loan performance analysis spreadsheet. This free tool will allow you to put in your loan and revenue details and easily calculate what revenue growth you need to see (if any) to verify this loan is a wise investment. Ready to get started?

Download our free loan performance analysis here.

Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone. They haven’t been reviewed, approved, or otherwise endorsed by any of the companies mentioned above. Learn more about our editorial process and how we make money here.
Meredith Wood

Meredith Wood

Editor-in-Chief at Fundera
Meredith Wood is the editor-in-chief at Fundera. She has specialized in financial advice for small business owners for almost a decade, and is sought out frequently for her expertise in small business lending. Meredith’s advice has appeared in the SBA, SCORE, Yahoo!, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, and more. Email: meredith@fundera.com.
Meredith Wood

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