For more than 25 years, I have been working closely with entrepreneurs, banks, financial institutions and businesses looking for funding.
Today, I am the Managing Director of MoneyMax FinGrow Pvt Ltd, and corporate funding and bank loans have been a major part of my professional journey.
Over these years, I have seen businesses at almost every stage.
I have seen entrepreneurs desperately looking for ₹10 lakh.
I have seen growing businesses looking for ₹1 crore, ₹5 crore and much larger funding.
I have seen businesses get loans and grow beautifully.
I have also seen businesses get loans and get into deeper trouble.
And after 25 years, one thing has become very clear to me.
Getting a loan is not the biggest challenge.
Using the loan correctly is the bigger challenge.
A bank can give you money.
But a bank cannot give you financial discipline.
A bank can increase your working capital limit.
But a bank cannot improve your gross profit.
A bank can give you a term loan.
But a bank cannot collect your receivables.
A bank can fund your expansion.
But a bank cannot make that expansion profitable.
That responsibility belongs to the entrepreneur.
And this is probably the biggest lesson I have learnt in these 25 years.
In My Early Years, I Thought Funding Was the Solution
When I started working in this industry, naturally my focus was on funding.
A customer comes with a requirement.
Understand the requirement.
Study the financials.
Identify the right bank.
Prepare the proposal.
Answer the banker's questions.
Get the sanction.
Complete the documentation.
Get the disbursement.
Customer is happy.
We are happy.
Loan sanctioned. Job done.
But as the years went by, I started looking beyond the sanction letter.
What happened to that business after six months?
What happened after two years?
Did the loan actually help?
Did turnover increase?
Did profit increase?
Did cash flow improve?
Did the entrepreneur become financially stronger?
Or did he come back asking for another loan?
That changed the way I started looking at business finance.
The First Big Lesson: Not Every Business That Needs Money Needs a Loan
This is something I wish every MSME entrepreneur understood.
When there is a cash shortage, the immediate thought is:
“I need a loan.”
But a cash shortage can happen for many reasons.
Your customers may not be paying you on time.
Too much money may be blocked in stock.
Your gross margin may be too low.
Your expenses may have increased.
You may be giving customers 90 days while suppliers demand payment in 30 days.
You may be withdrawing too much money from the business.
You may have used working capital for buying machinery or property.
Your business may actually be making a loss.
In all these situations, more borrowing may temporarily hide the problem.
But it may not solve it.
Sometimes the business doesn't need another loan.
It needs clarity.
I Have Seen Turnover Fool Entrepreneurs
This is another lesson I learnt.
Entrepreneurs love turnover.
₹1 crore became ₹2 crore.
₹2 crore became ₹5 crore.
₹5 crore became ₹10 crore.
Everybody is happy.
The entrepreneur says:
“Sir, business is growing.”
My next question today would be:
“Wonderful. But what happened to your profit?”
And then:
“What happened to your cash?”
Because these are three different things.
Turnover is not profit.
Profit is not cash flow.
And cash in the bank is not always profit.
I have seen businesses growing in turnover while becoming weaker financially.
Why?
Because as sales increased, receivables increased.
Stock increased.
Employees increased.
Rent increased.
Interest increased.
Working-capital requirement increased.
But margin did not increase.
Sometimes it actually decreased.
So the entrepreneur was working harder.
The team was bigger.
Sales were higher.
But the entrepreneur had less money.
That is a painful situation.
And it happens more often than people realise.
Working Capital Is One of the Most Misunderstood Areas in MSMEs
Over the years, I have realised that many business owners understand sales much better than working capital.
Let me make it very simple.
You buy today.
You sell tomorrow.
But your customer pays after 60 days.
During those 60 days, who is funding your business?
You are.
Or your supplier.
Or your bank.
This is why receivables, inventory and creditor days are so important.
A profitable business can still face a cash-flow crisis if the working-capital cycle is badly managed.
And this is where many entrepreneurs start borrowing more.
But sometimes the money they are looking for is already inside their own business.
It is sitting in:
Receivables.
Inventory.
Slow-moving stock.
Unbilled work.
Advances.
Poor collection systems.
Before searching outside the business for money, I have learnt to first ask:
“Where is the money already inside the business?”
That question itself can change the conversation.
One of the Costliest Mistakes: Using Short-Term Money for Long-Term Purposes
This is something I have seen repeatedly.
A business receives a cash-credit or overdraft facility.
That money is meant for working capital.
Then the entrepreneur sees an opportunity.
Land.
Building.
Machinery.
Another business.
Personal property.
Expansion.
The money gets diverted.
Now the asset may be good.
The decision may even make sense in the long term.
But the source and use of funds are mismatched.
Short-term money has gone into a long-term asset.
Then the working-capital cycle gets squeezed.
Suppliers need payment.
Salary is due.
GST is due.
Customers haven't paid.
EMI is coming.
Suddenly the entrepreneur says:
“Sir, I need additional working capital.”
Sometimes the real problem started months earlier when the wrong type of money was used for the wrong purpose.
This taught me a very important financial principle:
The purpose of money matters as much as the availability of money.
A Loan Should Create More Value Than Its Cost
Entrepreneurs often ask me:
“Sir, what is the interest rate?”
Of course interest rate matters.
But that is not my first question.
My first question is:
“What are you going to do with this money?”
Suppose you borrow ₹1 crore.
What will that ₹1 crore create?
Additional sales?
Additional gross profit?
Additional capacity?
Faster production?
Better collections?
A productive asset?
Or will it simply cover an existing cash-flow hole?
There is a huge difference.
Borrowing becomes powerful when the money produces enough value to justify its cost and risk.
Borrowing becomes dangerous when there is no clarity about how the money will generate returns.
The Cheapest Loan Is Not Always the Best Loan
Twenty-five years in this industry has also taught me not to look at interest rate alone.
Entrepreneurs naturally want the lowest rate.
Nothing wrong with that.
But funding has several dimensions.
Interest rate.
Tenure.
EMI.
Moratorium.
Collateral.
Processing cost.
Prepayment conditions.
Working-capital flexibility.
Security structure.
Repayment schedule.
And most importantly:
Whether the repayment structure matches the cash flow of the business.
A slightly cheaper loan with the wrong tenure can create more pressure than a slightly costlier facility structured properly.
So don't only ask:
“What is the ROI?”
Ask:
“Is this the right financial structure for my business?”
I Have Seen Good Businesses Get Rejected by Banks
Bank rejection doesn't automatically mean the business is bad.
Sometimes the business is genuinely good.
But the financial presentation is weak.
Documents are incomplete.
GST and financial statements don't tell the same story.
Banking transactions are not clean.
Cheque returns are high.
Existing obligations are too high.
Receivables are stretched.
The promoter's credit profile has issues.
Financial ratios don't support the requested amount.
Or the entrepreneur is simply approaching the wrong lender for that particular requirement.
This is another lesson from my journey.
Being eligible for funding and being ready for funding are not always the same thing.
A business owner should prepare for funding well before the day the money becomes urgent.
Because when money becomes urgent, your negotiating power reduces.
Don't Go to the Bank Only When You Are Desperate
This is one of the most important pieces of advice I can give an MSME owner.
Prepare before you need the money.
Maintain proper financial statements.
Keep GST filings disciplined.
Maintain banking behaviour.
Understand your credit profile.
Track receivables.
Track inventory.
Know your existing liabilities.
Know your repayment capacity.
Build relationships with bankers.
Because funding is easier to plan when the business is healthy.
When you wait until:
“I need ₹50 lakh in the next seven days or I cannot pay salaries,”
your options become limited.
Financial preparation should happen months before the requirement, not after the crisis arrives.
More Funding Can Sometimes Make a Bad Situation Worse
This may sound strange coming from someone who has spent more than 25 years in corporate funding.
But I believe it strongly.
There are situations where I would rather tell an entrepreneur:
“Don't borrow now.”
Why?
Because if the fundamental problem is not corrected, another loan simply increases the liability.
Suppose the business is continuously losing money.
You borrow.
The loan gives temporary oxygen.
Six months later, the money is gone.
But now you have the original problem plus an EMI.
That is not a solution.
That is postponing the problem at a higher cost.
Debt Is Neither Good Nor Bad
I don't believe in saying:
“Loans are bad.”
That is too simplistic.
I have seen debt create enormous business growth.
A well-structured loan used for the right purpose can help an entrepreneur increase capacity, purchase productive assets, improve working capital and capture opportunities.
At the same time, I have seen debt create tremendous pressure.
So debt itself is not the problem.
The question is:
Why are you borrowing?
How much are you borrowing?
For how long?
At what cost?
Where will you use it?
How will you repay it?
And most importantly:
What happens if your original assumption goes wrong?
That last question is important.
Business doesn't always go according to Excel.
I Have Learnt to Look Beyond the Balance Sheet
Numbers tell me a lot.
But after working with entrepreneurs for so many years, I have learnt to observe the person behind the numbers too.
Does the entrepreneur know his numbers?
Does he know his gross profit?
Does he know his receivables?
Does he know how much stock he is holding?
Does he know his monthly fixed expenses?
Does he know his EMI commitments?
Does he know how much money he personally withdraws?
Can he explain exactly why he needs the loan?
You can learn a lot about the financial health of a business simply by listening to the owner's answers.
This Is Why I Keep Coming Back to 7 Numbers
After seeing thousands of financial discussions over the years, I believe an entrepreneur doesn't need to become a chartered accountant.
But he cannot be financially blind.
At the minimum, know:
1. Sales
2. Purchase
3. Variable Expenses
4. Gross Profit
5. Fixed Expenses
6. Promoter Salary
7. Net Profit
These seven numbers start a conversation.
Then we go deeper into cash flow, receivables, creditors, inventory, borrowing and working capital.
But first, know your numbers.
Because when you don't know your numbers, you are forced to make decisions based on assumptions.
That is why I believe in:
Data Before Decisions™.
Another Big Lesson: Separate Personal Money and Business Money
This lesson became stronger and stronger for me over the years.
Many MSME owners don't pay themselves a structured salary.
Whenever the family needs money, they take it from the business.
School fees.
Home EMI.
Travel.
Investments.
Property.
Personal expenses.
Everything comes from the same account.
Then one day the business has a cash shortage.
The owner thinks:
“My business doesn't generate enough money.”
Maybe.
But first we need to know how much the business generated and how much the promoter withdrew.
This is why my approach today is:
Personal Finance First. Then Business Finance.
An entrepreneur needs clarity in both.
Funding Is Not Finance
This distinction took me years to appreciate deeply.
Funding is getting money.
Finance is managing money.
You may be excellent at raising funds and terrible at managing them.
You may get ₹5 crore from a bank.
That doesn't automatically make the business financially strong.
Financial strength comes from how you:
Earn money.
Protect margin.
Control expenses.
Manage working capital.
Use debt.
Generate cash.
Create surplus.
And eventually,
create wealth.
Funding is one piece of that journey.
My Role Has Changed Over These 25 Years
Earlier, when an entrepreneur came to me, the question was often:
“How can I get this loan sanctioned?”
Today, I naturally ask more questions.
Why do you need the money?
What happened to the existing money?
How much is blocked in receivables?
How much stock are you holding?
What is your gross profit?
What is your monthly fixed cost?
What are your existing EMIs?
What will this loan produce?
What is your repayment plan?
Because I have learnt something important.
Sometimes the entrepreneur needs a loan consultant.
Sometimes he needs a financial system.
Sometimes he needs better collections.
Sometimes he needs better margins.
Sometimes he needs expense control.
Sometimes he needs clarity.
And sometimes he genuinely needs funding.
The skill is knowing which problem you are actually solving.
This Is Also Why I Became a Business Coach
My journey in corporate funding gradually showed me something bigger.
Many business problems that eventually reach a bank actually started much earlier.
Poor planning.
Poor financial control.
Wrong pricing.
Uncontrolled expenses.
Weak collections.
Excess stock.
No clear goals.
No separation between personal and business money.
Borrowing without understanding repayment.
Growing turnover without growing profit.
I realised that helping an entrepreneur after the financial problem appears is useful.
But helping the entrepreneur build a financially stronger business before the problem appears can be even more valuable.
That is one of the reasons business coaching became such an important part of my journey.
If You Are Planning to Take a Business Loan, Ask Yourself These Questions First
Before asking:
“Which bank will give me the loan?”
Ask:
Why exactly do I need this money?
How much do I actually need?
Is this a working-capital requirement or a long-term requirement?
Can some of this money be released from receivables or inventory?
What return will this borrowing generate?
Can my present cash flow comfortably service the repayment?
What happens if sales fall by 20%?
Do I know my current liabilities?
Are my financial statements ready?
Am I borrowing to grow—or borrowing to survive?
That last question deserves a little silence.
Am I borrowing to grow?
Or
am I borrowing to survive?
Both situations need completely different decisions.
My Biggest Learning After 25 Years
If you ask me to summarise more than 25 years of experience in corporate funding and bank loans in a few lines, I would say this:
Don't borrow because money is available.
Borrow because the business has a clear requirement.
Don't decide the loan amount based on what the bank is willing to give.
Decide it based on what the business actually needs and can repay.
Don't use short-term money for long-term purposes.
Don't confuse turnover with profit.
Don't confuse profit with cash flow.
Don't borrow repeatedly to hide a financial-control problem.
And don't wait for a crisis before preparing your business for funding.
Most importantly:
A loan should strengthen a good business. It should not be expected to repair a weak business.
After 25 years, I still believe funding is an incredibly powerful business tool.
But only when there is clarity.
Clarity about the purpose.
Clarity about the numbers.
Clarity about repayment.
Clarity about risk.
And clarity about where the business is going.
That is why I say:
Data Before Decisions™.
Clarity Creates Cashflow.
And before asking,
“Which bank will give me a loan?”
ask yourself,
“Is my business financially ready for a loan?”
Check Your Business Before You Borrow
Before taking another loan, check the health of the complete business.
Take the free Business Health Check.
If cash flow is the immediate concern, use the free Cash Flow Health Check.
— Coach Dhejo Managing Director, MoneyMax FinGrow Pvt Ltd Corporate Funding Consultant | Bank Loan Specialist | Business & Finance Coach