As business owners, taking on debt can be an effective of managing your cash flow. Whether you need it for business expansion (eg. hiring more people, buying more supplies, getting a bigger office space), or simply to provide peace of mind in case of unexpected delays in customer payment collection, external capital injections are an important part of operating any business.

When your business should take on debt

From a cost perspective, business loans may be a cheaper form of financing than you think. The IRD in Hong Kong and IRAS in Singapore allows businesses to deduct the interest on the debt from income taxes. Debt may also be a cheaper form of financing than selling off a portion of your business where new shareholders/investors may demand dividends or short-term returns on their investment, and sharing control with them.

According to Jeb Ory, CEO of social advocacy group Phone2Action, taking on debt is a stepping stone to the growth of many companies.

“Access to capital can be the difference between explosive growth, linear growth and the death of your business. Debt should be used to extend runway and help businesses make purchases that they couldn't normally make if it makes them more competitive."

That being said, we know that the accumulation and mismanagement of debt can be a leading cause of financial troubles or even bankruptcy for small businesses. So it is important for you to know when you can consider it safe to take on debt.

You should take on debt if you can identify yourself with the following scenarios:

1. When you understand the different types of debt and their respective borrowing terms

Previously, we’ve talked about the various types of cash flow management solutions and the differences between loans vs. lines of credit. Different types of debt comes with different interest rates, repayment periods and general borrowing terms. Understanding the different options and how it relates to your business going forward is an important step before you take on any debt.

2. When you have established a plan for how to use the funds and how to repay the funds

To stay ahead of increasing competition or changing macro level trends, you should have a business plan for which areas you’d like to invest in before taking on debt.

          • Is it related to new lines of product or service?

          • Perhaps you’d like to take advantage of digital marketing trends and increase your spend on Google or                       


          • Maybe you and your team are overwhelmed with work and the business would benefit from additional new


          • Or maybe, your inventory are flying off the shelf so you just need additional capital to buy more goods。

Whatever the reason may be, it’s important to have a measurable process in place before you take on debt. This way, you are also better setup to evaluate whether the return on investment related to the debt was worthwhile.

作為企業老闆,舉債可以是其中一個有效管理現金流的方法。無論你是需要資金去擴展業務(例如: 聘請更多員工、添置更多貨品、搬到更大的辦公室),抑或只是買一份安心,以應對客戶未能按時清繳款項的突發情況。尋找外來資金確實是任何企業在營運時的重要一環。


從成本角度來看,商業貸款是一種較便宜的融資方式,比你想像的可能來得便宜。 香港的稅務局和新加坡的國內稅務局允許企業從所得稅中扣除債務利息。因此,跟出售部分業務或引入新的投資者相比,舉債亦可能是一種較便宜的融資形式。因為新股東/投資者有機會會要求分發股息或收取短期的投資回報,甚至會要求你交出企業的部分控制權。

社會倡導組織Phone2Action的行政總栽傑布·奧里(Jeb Ory)認為,舉債是許多企業在成長時的必經階段。




1. 當你對不同類型的債務和借款條款有充分了解


2. 當你制定好如何運用資金以及償還款項的計劃


          • 是否與開發新產品或推出新服務相關?

          • 你或許會想配合電子營銷的趨勢,並增加你在Google或Facebook上的投放?

          • 你和你的團隊的工作量會否已經超出負荷,添加人手會否令業務有所得益呢?

          • 又或者,你的庫存不足以應付需求,你正需要額外的資金來購買更多商品。


Subscribe To Our Blog

Stay on top of the latest SMEs Management, Cash Flow tips, and best practices

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

訂閱我們的 Blog


Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.