Frankly, I did not use an 'EMI' for anything during my professional career. Only now, there was some occasion to experience it 'first-hand', hence this blog.
It seems that entire businesses like housing finance have been built up on this concept. Since that's working for all, there must be merits in the idea and concept.
But this concept has caught on for almost everything, financing your dream holiday, buying that expensive car & as I experienced it for the odd business loan too.
I understand the lure of the irresistible holiday or the loaded car and the need to enjoy now and pay later. But financing a business need on EMIs ? Is it feasible?
So far, I think that this concept is working. No doubt, there are deadlines to meet, but more realistically, it pushes all in the team towards meeting commitments.
One more aspect is that it sharpens the mind to deal with the impending due-dates. May be it makes us think short-term but this is what brings about clarity.
Also, a business need is compensating a set of people however disconnected, on a timely basis, to deliver whatever services they have to deliver for the business.
This brings back focus on essentials, helps trim needless excess costs, makes you go the extra mile & ensure that business is generated to meet the EMI at least.
Again the need for business need is never trivial but a road-map to meet customer demand and in general, it means always keeping the eye on the ball, in this case the EMI.
So, conserve scarce capital & plan with EMIs only but where the end-use of loan or the payback for the business idea can be tracked. THE SECOND OPINION helps you calibrate your plans !
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