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I've worked in small start ups before, but all boot strapped out of pocket / revenue. Wouldn't having to borrow money constantly be a red flag that the business
by trentgreene 4y ago
I've worked in small start ups before, but all boot strapped out of pocket / revenue. Wouldn't having to borrow money constantly be a red flag that the business is bad / not profitable?
- disgruntledphd2 4y agoDepends. If your income comes in 90 days post invoice, but you pay monthly then borrowing some money to smooth over cash flow makes loads of sense. If you need to buy loads of stuff to sell, it also makes sense. Software businesses are pretty weird in the lack of capital costs.
- nly 4y agoAn alternative to borrowing to achieve that smooth cash flow is treasury savings.
- Kye 4y agoBeing able to is actually a green flag. Banks wouldn't keep lending it if the companies didn't pay it back. This isn't VC we're talking about here.
- trentgreene 4y agoInteresting, I can see this as lending implies some due diligence into a companies financials. At the same time, at the personal level, I know I can get lines of credit that would be very tough for me to pay back. Is corporate borrowing much more stringent?
- deleted 4y ago[deleted]