How to understand that a loan will lead a company to disaster

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Lending can bring a business both to the plus and to the minus. Financial director of Neskuchnye Finansy Aliya Galimzyanova tells how companies make calculations when they want to take out a loan in order to correctly predict all the risks.

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When a loan will lead a company to disaster
A businessman was inspired to expand production, but namibia telegram the plans collapsed "like a house of cards". Another entrepreneur took out loans to overcome a cash flow gap, but in the end the business "drowned in a hole" with loans. Does this sound scary and hopeless?

To avoid financial stress, you need to use or not use credit wisely. The leverage effect and return on equity indicators will come to the rescue.

Let's share a couple of interesting cases using credit funds.

The story of Nokia's excessive debt has long been controversial. Once the world's largest mobile phone maker, it has been struggling with its business due to large investments in research and marketing financed by debt.

Sales and revenues began to fall, cash flow management became difficult, and debt obligations remained. Changing strategy and investing became increasingly difficult. Eventually, Nokia gave in and sold its mobile phone division to Microsoft for $7.2 billion.

Thus ended the history of Nokia as a leading manufacturer of mobile phones. The company is now engaged in the production of telecommunications equipment.

Where to get money for business and how to manage finances? Experts from the educational platform for entrepreneurs "Kurs" will tell you .
The following is an educational story about the legendary investor Michael Burry, who predicted the US mortgage crisis. His fund was able to earn about $700 million using credit default swaps (CDS).

Signs that a loan will not solve the problems
If you decide to take out a loan to develop your business, it is extremely important to answer the following questions: “Is my business profitable?” and “Will business development bring profit or losses?”