7 Smart Reasons to Get a Business Loan
You’ve poured your time, energy and money in to your small business and the business is making it. But do you need more money? Following are 7 reasons that you might do well to get a business loan to help your business do even better:
The company needs more equipment.
Whether you are manufacturing something or creating information, there always seems to be more equipment to buy. From computers to copiers, expensive coffee machines to vehicles, the sudden need to purchase some new equipment to replace something old or simply to make work go better can come up at any time. When it does getting a business loan can be a great way to finance major purchases that are beyond the scope of a credit card.
You have to purchase more inventory.
You can’t sell what you don’t have in stock. And while having a little waiting list could make it seem like your product is in high demand, it could also give people time to shop somewhere else. It is important to always have enough product on hand, or the materials to make those products. This is where a revolving loan can be helpful, allowing you to purchase inventory when you need to, over and over again, as you grow and meet greater demands.
It might be time to expand your location.
When business is good that can be a great time to take out a loan and make things bigger, because bigger is almost always better. Whether it is expanding your current location or adding a new location, it takes money. Expanding your existing location might mean renting the building next door or adding an addition. It might mean simply buying more shelving and having more product and diversity in store. It could mean expanding to online sales, or taking online sales into a physical store. Or, it could mean moving to a different location that is larger, better suited to you, or in a better location. It all takes money. And when things are really looking good for the business then taking out a loan to open a new location might be just what the business needs.
You found a lower interest rate.
Sometimes getting a business loan is just about keeping expenses down. If you have existing business loans it can be a good use of your time to occasionally look around to see if you can get a better interest rate on those debts. Just a single interest percentage point, even less, can save you thousands of dollars each year – money that you can reinvest in the business to grow it more. When considering interest rates you may find that rather than a new loan it makes sense to get cash for future payments on a structured settlement that you hold. In many cases, particularly for a fledgling business, it can cost less money to sell your structured settlement payments to fund business growth than it would cost you to pay interest on a loan.
Your business needs fresh talent.
For many businesses payroll is the biggest expense. But despite how much it costs sometimes you need more people, and you need more talented people. That can cost money. While investments in talent will bring in money over the long run, it can be a large expense in the short term, particularly through training. A business loan, or taking cash for future payments on a structured settlement, can be a good way to fund hiring and bringing on some new, talented staff members.
Build business credit for the future.
At some point in time almost every business needs to borrow money. Thus, it makes sense to start building credit in the name of the business now so that you can get a good rate on credit in the future.
An unforeseen emergency comes up.
And of course, there are always surprise emergencies that come up which cost money to solve. When this happens, and your company doesn’t have enough cash on hand to manage it, a business loan may be what saves you.
As you work to grow your business be sure to always have a cash reserve on hand because you never know when something will come up and you will need some quick cash.
Author Bio: Joseph Green is a professional internet marketing analyst at Strategic Capital. He believes in providing the best and suitable financial advice. Joseph has vast experience in various financial sectors and specializes in structured settlements. He keeps writing about helpful and practical financial solutions.
Do you need extra funds for your small business? An SBA loan is the best bet for small businesses with low rates, long terms and low monthly payments. Visit SmartBiz today and discover in about five minutes if you’re qualified for an SBA loan. Use the promo code “blog” and receive $500 off of your closing costs.