What do you think of obtaining a credit card receivables loan in order to supplement cash flow when the business currently cannot work through a more traditional borrower?

Entrepreneur, Business Planner and Angel Investor
min read
Opinions expressed by Entrepreneur contributors are their own.
The answer is hidden in your question. Additional debt is never good or bad in a vacuum; it depends on what got you into the need for that extreme debt, and how realistic your prospects of getting back out of it.

Do you have a realistic and believable projection of cash flow? Are you prepared to lose whatever you pledge as collateral for that debt? What are the prospects for the future? Is this a last resort that will tide the company over until things get better? And how do you know that? What trends have gotten your business into this situation, and what changes are you making to turn those trends around? Do you have a business plan you can believe in and a clear path towards the future?

If not--if you don't have a comfortable idea of how your situation will evolve in the future--then stop, and reconsider. Of course you have to deal with uncertainty, but put as much of an educated guess as you can into it. Then go back and answer your question with your business plan.

Tim
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