If you’re thinking about taking on debt, you’ve got two options: Credit Cards and Business Loans.
While both usually come from a banking institution, they are incredibility different approaches to borrowing money.
“What I think you want to pay attention to is you want to understand what your trade-offs are in both. So, if I’m going to take out a loan, I probably am going to try to have a loan that doesn’t change in interest rate. Now, obviously, there are some exotic products where you can have ARMS adjustable rates. That’s generally in a mortgage. But, you can also have rates that might change in a business loan.
You want to stay pretty consistent with what your rate is, which takes me over to a credit card loan, where basically, you’re paying on a credit card, even if you have no interest on a credit card in the beginning, very often, whether it’s 12 months in or whatever, your percentage of interest that you have to pay on that money that you borrowed is going to go from zero to 12 to 18%, so you want to be quite careful on what your interest rate is on the credit card at some point in time.
When you’re thinking about it, it’s really risk reward, right? If you can get a credit card for 12 months no interest, and you can pay down all of that credit that you’ve taken out in the 12 months, well, theoretically, you have to pay no interest on that, whereas if you got a 12-month loan, you’re going to have to pay interest month by month on that loan.”
While there is certainly risk involved with massive credit card debt, a business loan is generally more favorable provided you can prove your businesses credibility.
However, the ‘best’ option is completely individualized based on your financial needs and the services in your gym. Learn more about which type of financing may work to your benefit by applying for the OPEX Gyms program today.