Loan duration affects the financial health of a startup or growing business in several ways:
Cash Flow Management: Shorter loan durations typically mean higher monthly payments, which can strain cash flow. Longer durations may offer lower payments but result in higher total interest costs. Interest Costs: The total cost of borrowing is directly influenced by the loan duration. Entrepreneurs must balance between manageable monthly payments and minimizing interest expenses. Financial Flexibility: Longer loan durations can provide more financial flexibility by freeing up cash for other operational expenses or investments.