The choice of loan duration can significantly influence an entrepreneur's strategic decisions:
Growth Strategy: Longer loan durations can support steady, sustainable growth by freeing up cash for reinvestment. Short-term loans might be better for rapid, aggressive scaling. Risk Management: Long-term loans can mitigate the risk of cash flow shortages, while short-term loans need careful cash flow forecasting to avoid liquidity issues. Operational Decisions: Loan duration impacts operational flexibility. Longer durations may allow for more experimental or innovative projects that require extended time to yield returns.