As a small business owner, even a whisper that you’re considering taking out an L O A N can spur opinions of sudden know-it-alls. There’s the general naysayers, those who heed caution, success stories and those that say it’s a ‘must’ for growth. Everyone will have something to say, but the truth is, without the necessary funding, your business will stay at a stand-still, or worse, collapse.
There are many reasons to get a business loan but of course, not any old reason is an excuse to potentially get into business debt, but that doesn’t mean that there aren’t intelligent reasons either. If your business is ready to take the next step the age-old adage ‘you have to spend money to make money’ rings very true. If you want to successfully grow your business, you’re going to have to step out of your comfort zone – slightly.
Here are 8 reasons to get a business loan
1. To expand your business
If you’ve grown out of your old shoes, it’s common sense to go up a size and the same is true in a business sense. If you have too many employees squeezed into one room, or perhaps your restaurant has become over-crowded, these are classic signs that it’s time to expand.
Best business loan for expanding: SBA loans, unsecured business loans
Caution: a new product launch or entering into a new market needs to be carefully researched and executed. You’ll need to have the right equipment and team to go forth, and a business loan with a flexible tenor is a good way to go about it.
2. To increase your inventory
This is surely one of the biggest expenses for a business – no matter the type. It’s often the case that you’ll need to buy inventory in advance before seeing a return on the investment. This is particularly true for seasonal businesses or during slower seasons where an Equipment and Vehicle Finance loan, could be the best option. Getting your hands on this kind of loan would allow you to purchase the inventory you need and get your business through the season.
Best business loan for inventory: Business lines of credit, merchant cash advance
3. To recruit and hire new talented employees
When initiating a startup or running a minuscule business, the term ‘multitasking’ will take on a whole new meaning. You’ll reach a moment where you realize that expanding your website, dealing with customers, trying to put yourself on the map, all the while bookkeeping can become overwhelming. This’ll surely take a toll not only you -but the business.
If you or your employees are juggling too many things, it eliminates work quality and focus. A business model overhaul is definitely in order; investing in talented individuals will surely lead to an increase in revenue and more importantly, help to build the core foundations of your business. What’s more, is you’ll amass extra time to focus on the ‘bigger picture’ – that alone may be a solid reason to need business loan options, and there are plenty of them to be found.
Best business loan for hiring fresh talent: Unsecured business loans, business lines of credit
4. To improve your business’s cash flow
According to a U.S. Bank study, 82% of businesses fail due to poor cash management. It’s all well and good building your dream business, but at the end of the day, it’s all about the money coming in that’ll help to keep your business standing tall. When obstacles stand in the way of meeting your business goals, you’ll need business loan options to keep the money flowing which will allow you to continue marketing and seeking new customers to drive revenue.
Best business loan for cash flow: SBA loans, business lines of credit
5. To move your business to a new location
Your business might’ve been doing well enough at your current location, but – as they say – the grass is always greener on the other side. The demographics of your original location may have shifted enough that there are better prospects elsewhere. Obviously, that comes with loads of expenses, including hiring movers, the cost of a new location, the paperwork entailed in the shift, and so on. That’s where business loans can truly come in handy.
Best business loan for moving location: SBA loans, unsecured business loans
6. To improve and expand your marketing strategy
Providing stellar service is important, but if you’re only attracting customers from within a mile radius, you’ll struggle to scale up your business. Marketing plays an essential role in generating more business as well as establishing a recognizable brand that will draw more people in through your doors.
Of course, in today’s digital age, you’ll likely consider incorporating social media marketing strategies into your overall marketing campaign. There are plenty of advantages to this, including the fact that it’s free to sign up, you have a huge audience at your disposal, and you can come up with creative and personalized approaches to engaging with potential customers.
Best business loan for boosting marketing strategy: Unsecured business loans, business lines of credit
7. To overcome upaid invoices
Different types of businesses come with different obstacles to overcome. For truckers, construction workers, manufacturers, and contractors, it’s fairly common to have slow-paying customers. Having too many unpaid invoices can create a drag on your business’s cash flow, which will also keep you from taking care of other important aspects of your business.
The solution is invoice factoring, whereby lenders front you approximately 80% of the value of your unpaid invoices and collect the funds from your customers on your behalf. After collecting, the lender then provides you with the remaining amount due, minus a percentage that they keep as compensation for the services they provided. Needless to say, you’ll want to develop your own strategies for dealing with unpaid invoices so that you don’t need to always turn to lenders for help.
Best business loan for overcoming unpaid invoices: Invoice factoring
8. To update and upgrade your business equipment
Keeping your business running at full capacity oftentimes relies heavily on having properly operating equipment. But, even if your machinery is working correctly, the rate at which it completes its task may be significantly slower than a newer model. Updating your equipment can make a crucial difference to your business’s cash flow.
The difficulty is that updated models of machines are constantly being produced – the air compressor you purchased a few short years ago may already be outdated. That can be extremely frustrating for the people whose income relies on the performance of business equipment. Who has money to buy new appliances every few months?
Fortunately for small business owners, purchasing equipment is not the only option. Consider the differences between equipment leasing and equipment loans so that you can make the right decision for the benefit of your business.
Best business loan for updating equipment: Business equipment loans, SBA loans
‘Other’: Get a loan for any business reason
Here we’ve mentioned some of the most popular reasons that SMBs may need business loan options. If you’re thinking ‘that’s not why I need one’, don’t sweat. If the pros outweigh the cons and a loan will keep you from closing shop or better yet, business expansion then it’s the right way to go. You’ll have no issues in getting funding from one of our alternative business lenders who are happy to provide loans for any old reason – so long as it goes into your business that is.
At Become, we can help you to expand your business or to simply keep it going. By partnering with selected lending companies, we offer a premium marketplace that gives business owners fast and easy access to the loans that are best suited to their business needs.
How to get a fast business loan in 3 easy steps:
Use Become’s Business Funding Marketplace to compare offers from many lenders to get the best and fastest business loan for you.
1. Fill in the quick online application to see if you qualify
2. Compare and choose from lenders and loan options that are best suited to your needs
3. Receive funds in as little as three hours!
Knowing when to get a business loan can make or break your business. No matter the reason you’re debating getting a business loan if taking one out is going to keep your business from collapsing, or if you have weighed up all the numbers and can see that taking a loan will improve the health of your business – then you know what to do. All business decisions involve an element of risk and at the end of the day, only you can decide if it’s worthwhile.
Disclaimer: The above information is of a general nature. Before receiving a business loan you should consider the loan agreement and finance documents provided by the lender, and whether the loan is suitable for your business.