How I Assess My Ability To Service A Debt

Author

Ryan Chen
February 19, 2025

In partnership with

Hi there,

Welcome to Loancater’s weekly newsletter. This is approximately a 4-minute read.

In today's newsletter, we’re going to go over the approval criteria for getting a high limit credit card


We are going to go over…

  1. What is the area of margin I use when I borrow debt

  2. How I calculate my inflow and outflow to see if it’s sustainable

  3. How I determine if I should borrow or not

Schedule a FREE strategy session with us here (link) or apply here (link) for a business loan.

Actionable Tips

Most people look at ROI which shows the return on investment relative to the amount they borrowed. I.E if you borrow 100k and you make 150k your ROI is 50%. They then decide that if they need to borrow at 50% interest loan the deal no longer makes sense because the ROI and in cost of capital is the same even when the loan size is only 20k.

However, if you are only paying 50% on 20k to make a 150k revenue deal work because you already have 80k your ROC (Return on capital) is still 20k even after the principal is taken out.

That deal makes sense even because your ROC leaves you with an additional profit of 20k.

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💰 Loancater’s Application

Get the best business loan in the market here (link)

✔ Clients Who Worked With Us In The Past

See previous business owner who were happy to work with Loancater (link)

⭐ Different Type Of Loans

Type of funding product available in the market (link)

What Is The Area Of Margin I Use to Borrow Debt

Anytime we borrow in Loancater I always look for a 20%+ margin so I have room for error. That ensures that if something goes wrong I have some room before the deal goes into the nonprofitable zone.

How I Calculate Inflow And Outflow to See If Its Sustainable 

I use this calculator here to calculate monthly income and future AR alongside current + future expenses. (link)

How I Determine If I Should Borrow Or Not

ROC and 20% margin room are what I am looking for. That’s how I decide if I should borrow capital to finance a project. Most of the deals I finance are done through 0% interest credit cards.

How I Can Help You

If you like this newsletter and want to work with me, there are a few ways we can do so:

  1. You can apply for a business loan here (link)

  2. You can apply for credit repair by emailing [email protected] “I want credit repair”

  3. You can apply for a free 30-minute strategy session for credit card processing & ACH  here (link)

Or,  you can reply to this email.

I reply to absolutely everyone.

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