Running a small business is hard work. Acquiring capital to make it easier may seem like a good idea, but taking on a small business loan is not a small consideration. Many entrepreneurs have educational loans, or mortgages, and know first hand the responsibility of a financial loan. You should not consider a small business loan if you’re looking to pay personal bills or if your business is losing money. Do consider a small business loan when your business is healthy and an infusion of capital could result in growth and increased revenue. In fact, when business is good is exactly when you want to think about growth. But make sure you thoroughly research all your options, including merchant funding, SBA loans, and business lines of credit.
Anyone who has started a business has heard the statistics about how many businesses fail within the first few years. Turning a profit is certainly reason to celebrate, but long-term success requires continuous growth. It’s not enough to get by comfortably. Businesses have to grow each year to stay ahead of inflation and rising costs of doing business. What is profitable this year may not be next year. Here are four instances when business owners should consider a small business loan to keep their businesses growing.
Protecting Your Stake in Your Company
You came up with the idea, and it was your hard work that got the company up and running successfully. You are now ready to grow the business, but you don’t want to lose your stake in the company by taking on investors, or selling more shares to existing shareholders. It’s understandable you don’t want to lose part of your company when you need capital to take your business to the next level. A small business loan is a good solution. A small business loan costs money, but it allows you to retain your stake in your company. If the capital is used wisely, the payoff is worthwhile.
Opportunity is Knocking
Business owners are often advised to put money aside for a rainy day, which is inevitable in business as in life. But it’s important to remember you have access to capital for a good day. When an opportunity arises to take on a big project or add a new line of inventory, that’s a chance to significantly grow your business. A big opportunity could lead to big growth.
If you don’t have the money to hire the additional staff and equipment needed to complete a new project, or buy new inventory, consider a small business loan. While business opportunities may lead to bigger things, they rarely come with a reliable projected income schedule. A small business loan can not only provide the capital you need to take advantage of a new opportunity, but also carry you through the day-to-day expenses until the project is completed and new revenue is generated.
Bigger Might be Better
Expanding a current space or opening a second location are the stuff business dreams are made of. Unfortunately, it’s expensive stuff. Before deciding on expanding, consider the costs versus the potential increase of income, and the ability of the expansion to attract new business without compromising the happiness of existing loyal customers. Like any investment, expansion only makes sense if the chance of increased profit is favorable.
If expanding your business looks like it will lead to additional revenue, carefully decide on the ideal timing to maximize your investment. Often expanding comes with a sense of urgency, like a restaurant wanting to build an outside patio in time for summer, or an accounting office opening a second location well before the start of tax season. Expansion often takes longer than expected, so carefully map out a generous time frame and factor this into the terms of your loan.
Expanding your current location, or opening an additional location can mean a big boost to business. A small business loan can make your expansion dreams come true, allowing you to stay focused on managing the existing business while preparing for new growth.
If you are spending too much time handling administrative and operational tasks, dividing your attention away from selling your business’s products or services, it may be time to hire talent. Small business owners have to take on several roles when they launch a new company, but as your business grows you’ll need to fill those roles with experts. If hiring talent will make your business more competitive, more innovative, and better able to service customers, a small business loan may be the answer.
Investing in people can be more important than investing in space and equipment. New talent infuses your company with fresh ideas and energy and revitalizes your business. Hiring experienced professionals can not only give you expert insight into how to better run your business, but it can also give you access to their network of business contacts. Having trusted staff capable of running the business can also prove invaluable when you are away on business, have a personal emergency, or are lucky enough to take a vacation. Small business owners can’t run a successful business alone. A small business loan can supply the capital you need to create a top team who will in turn help grow your business and generate more revenue.
Obtaining a small business loan to grow your business can be a game changer. Getting capital to maintain your stake in your company and to take advantage of a business opportunity, expand your location, or hire new talent can take your business to the next level. Seizing an opportunity to grow your business with a small business loan is the first step. The second is to make sure the rates and terms of your small business loan are responsible.
Acquiring capital to grow your business costs money, so maximize your investment by seeking favorable terms with a reputable lender. When choosing a small business loan, look for rates you can reasonably afford to pay back in a comfortable time frame. Since growing your business often depends on quick action, make sure your lender can accommodate a loan efficiently. If this will be your first small business loan, you may want to look for a lender like Lendistry, with experienced professionals with access to a variety of programs to find the perfect product for your needs. A good lender can get you a loan, but a great lender partners with you to offer responsible rates, reasonable terms, and caring guidance to help you grow your business.
Tuesday, March 30, 10am-1:30pm UCR Palm Desert Center FREE
Lendistry’s nonprofit partner, The Center, will be hosting an educational event at the UCR Palm Desert Center: “Access to Capital – Small Business Workshop.” Sessions will include Managing Your Personal and Business Credit, Cash Flow Analysis for Lending, and Funding Sources for YOUR Business. These sessions will be presented by industry professionals, many with decades of experience helping small business owners. Look forward to presentations by Experian, Pacific Western Bank, and an entire panel of lenders – all ready to answer YOUR questions! Click here to register.