The loan will pay for the rest of software I'm building that will automate the deployment of my SaaS platform. This cuts my development time for each new client down by 95% - making me scalable. In a few months I will have it in my hands ready to open up my marketing activity now that I can deliver much more rapidly. It's tempting to use some loan money for marketing activity. Full disclosure, I don't know how to approach marketing yet.

Generally speaking - having access to more capital is a good thing - particularly when you aren't hemorrhaging equity to get access. Have you talked to the bank about closing on your "need" amount, and having them convert the remainder into a line of credit?

Beyond that - this really comes down to a few loan terms, and some math.

How does it impact the payment? Are you comfortable with the payment on the higher amount? How does it change your break even point at the cash flow level?

Are there prepayment - early payment penalties? If so, are they worth the additional capital in the event you don't utilize it and want to pay it down?

How is the loan interest calculated? Is it simple interest or amortized? In the case that its simple interest, you'll pay that interest regardless, because its rolled into the loan from the start.

In any event - best of luck with the upcoming launch and solving the marketing challenge! Happy to help you dig into that further!

Ryan Rutan

Answered 5 years ago

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