The negative impacts of getting stock on credits for your business.

[King Belieal]

They say that credit is part of the business cycle. While that may be true, getting stock or productive inputs for your business on credit is not the best thing to do ideally.

One thing it does is that you might end up having huge revenue but less profits because you would have to pay for the last stock you got on credit. I personally don't like it.

What do you think about getting stocks or productive inputs on credit for your business? Healthy or unhealthy?

 

[Starmix]

I think it all depends on the businessman. Much better to set aside a certain budget for credit payment so that he could have a good reputation to the creditor. That's one way to build strong camaraderie and in the next credit it will be easier to transact even without a collateral because of trust.

 

[Augusta]

Yeah you are right one might get stock on credit but one might end up having less profits. this is because you have to pay for the stock you got on credit. So this means less profit

 

[magnus2022]

It depends on thr rate of turn over. Once, the business is moving and customers are patronizing the business, buying products on credit will not affect thr business. Where it use to be a problem is when the business is stagnant. If the business have a poor sales, the businessman have a problem on hand.

 

[Fidelia]

It depends on thr rate of turn over. Once, the business is moving and customers are patronizing the business, buying products on credit will not affect thr business. Where it use to be a problem is when the business is stagnant. If the business have a poor sales, the businessman have a problem on hand.

You are right on this. If a business continually makes sales, there is no harm in buying stocks on credit. A business that clears stocks in two days is strong enough to get stock on credit. Afterall, it would be able to easily sell off and pay suppliers.

 

[Passionate-writer]

I think it all depends on the businessman. Much better to set aside a certain budget for credit payment so that he could have a good reputation to the creditor. That's one way to build strong camaraderie and in the next credit it will be easier to transact even without a collateral because of trust.

I do not think that there could be any disadvantage of getting stocks on credit. I think that buying products and paying for it later is a pretty common thing in the business world. There are many businesses that engage in this habit.

 

[Kross]

I wouldn't want to go through a business cycle to sell and use it just to pay credits. It would seem very painful to me..

 

[Suba]

One of the negative impacts if you get stock on credit or debt is if the price of goods falls then you will have difficulty paying the debt. In business, many suppliers who offer goods on credit usually come in a week to collect debts and add stock.