How Can A Small Business Loan Help You Grow?
You may be wrong if you think taking out a loan is bad for your business!
It’s understandable, though if you are very reluctant to incur more debt. The word “debt” alone can cause anxiety, but here’s the thing: You might be missing out on opportunities to remain competitive and successful just because you dismiss entirely taking out a loan as an option.
You know that for your business to grow, you have to improve, innovate and expand. But almost always, that requires funding!
You might have enough cash to fund growth but if you have additional funds from a small business loan for instance, just imagine what your business can accomplish. There are many non-bank institutions, like Camino Financial, that offer amazing financial products that won’t drive you to bankruptcy.
What Is A Small Business Loan?
A small business loan is an amount of money that is borrowed to satisfy a small business’ needs, such as the purchase of equipment or inventory, construction, renovation, expansion, and even debt refinancing.
These loans are available from individuals, banks, credit unions and other financial and government institutions.
According to the U.S. Small Business Administration (SBA), a small business is an organization with less than 500 employees. But to qualify for a small business loan, you need to meet several other conditions. For instance, when you apply for small business loans with any lender, they require that your business should have been existing and making a profit for a certain amount of time.
Also, when you apply for a small business loan, your potential lenders will want to know your purpose for the loan. To be approved for a loan, it is imperative you have an excellent business plan and credit rating, among others. If you are trying to take out a small business loan for reasons that have no bearing on your operations, your application will be surely denied!
Uses of Small Business Loans
You can plan and budget for the future but there are still events you cannot possibly anticipate. Here are some examples of why taking out a small business loan should always be on the table.
1. Technology is key
As technology advances exponentially, your business equipment can suddenly become obsolete and fail to meet the growing demands of your clients and customers. If you delay in purchasing new equipment because you’re short on funds, it’s going to be a loss for your business.
Just imagine an auto repair mechanic only using a wrench to diagnose a car full of computer chips.
2. Expanding your operations
You have been trying to expand or open up a new branch in another part of town.
When you least expect it, office space becomes available but a lot of work has to be done to fix the place up. The possible cost for repairs and renovation is more than you expect.
Do you forgo renting the space just because you have insufficient funds for the renovation?
3. Buying more inventory
Your supplier is having a sale and is now offering a big discount for bulk orders.
You can purchase a year’s worth of inventory at only 75% of the price you usually pay. Unfortunately, you haven’t budgeted for such a sale.
Again, will you let this opportunity pass by just because you’re reluctant to take out a small business loan?
It’s Always a Good Moment to Get a Small Business Loan
The examples above illustrate opportunities that may not come to pass again. Having stated that, it’s best if you check out now what small business loans are available to you. When you encounter such opportunities, taking out a small business loan may prove to be the wisest decision you’ve ever made!
Now you have a better idea of how a small business loan could come in handy. Take note though; if you are not eligible for this type of loan, there are many other financial products that will surely help you grow your small business.