Introduction
There are many circumstances in which organizations and people may need cash loans. People may need loans for many reasons like education, weddings, medical treatment, etc. However, the need of loans cash is much seen in organizations and companies as compared to people. It is seldom seen that an organization is carrying on its operations without the involvement of loans and credits at all the levels of organization.
Loans cash may be considered as the source of finance, if the organization or the individual realizes that without the loan cash, the operation or the processes cannot be preceded. However in order to get loan cash, the need analysis must be done. If the organization is able to carry or the operation or the process, without the loan cash, then there is no need to get the loan. Alternative sources of finance may also be considered instead of taking the loan.
The decision whether to go for loan cash or not, may be dependent on the rate of interest of the loan cash. If an organization or the individual is able to cope up with the interest rate and they think that they would be able to pay the interest at certain rates, properly then loan cash may be considered as the source of finance. However if it is not possible for the individual or the organization to pay the interest at particular rate in the future, then loan cash cannot be considered as the source of finance.
The time period for the repayment of the loan cash is also a decision factor for deciding whether to go for loan cash or to manage some other source of finance. If the time period for the repayment of the loan is feasible for the organization or the individual, then the loan cash opportunity can be availed.
The covenants imposed by the financial institutions and the banks are also needed to be considered in order to decide in the favor of loan cash or against the loan cash. If the organization or the individual is able to cope up with the covenants, then loans cash may be availed in order to carry in the operations or processes.
Conclusion
Check the availability of the other sources of finance, before going for a loan cash. If organizations or people and organizations do not find any other source of finance, then loan cash option must be availed. This is because the loan cash comes up with many inherent problems and covenants, which might be problematic to handle.
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