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Common Mistakes Small Business Owners Make With Debt Repayment When you run a business, you need capital at some point. Using all your savings might look like the best option, but that may spell trouble with your personal finances. Taking debt is sometimes the most viable option if you understand how debt works. Debt is often misunderstood and associated as a negative factor. But it can help you run your business if you are short of funds. It can provide low-cost capital to grow your business and earn higher profits. Benefits of Having Debt You read it right. Debt has its benefits. For example, you want to expand your production for a big order but don’t have funds for the same. Taking a debt at a reasonable interest rate could be a profitable deal. Delivering big orders on time and with quality could help you win more big orders and generate higher returns. And if you pay your debts regularly, you can maintain a good credit history. It could help you get better credit terms from creditors in future. Moreover, certain types of debt bring with them tax benefits. Debt, if not managed properly, could be a double-edged sword. Taking too much debt at a higher rate without analyzing the company’s cash flow and accounting for downcycles could make you miss regular monthly payments. Instead of defaulting on payments and entering the debt spiral, it is advisable to plan your debt end-to-end, from how much to take, where to use, and how to repay, even before you take debt.