Small businesses face many expenses that just pop up out of nowhere putting you and your business in situations where you need to seek business loans.
If you own any type of business, you know how tough it can get sometimes. You are constantly making tough decisions, working overtime, and you always need to ensure that your business has sufficient cash flow to stay afloat. You may also face many expenses that just pop up out of nowhere leaving you with the task of figuring out how to keep your operations running smoothly. Getting a Business Loan may make all of the difference.
When you need funding, one of the options you have is to get a business loan. Although getting a business loan may seem risky at first, it can be one of the best ways of financing small business operations and grow your business without giving up control of your business operations.
Common Questions About Getting a Business Loan
- Should I start my small business with a business loan?
- What is working capital?
- Can I buy inventory with a business loan?
- Can I get equipment loans for small business?
- Can I use a business loan to hire new talent?
- Should I expand my products and services with a business loan?
- I need a business loan to open a new location.
- I want a business loan for unexpected expenses.
- Can business loans cover ad spend?
- Can getting a business loan build my business credit?
- Can I use business loans to take advantage of business opportunities?
The following are answers to some questions you may have about business loans:
1. Should I Get a Business Loan to Start My Business?
Just because you are starting a small business doesn’t mean you should start small. If you want to get your new small business off the ground swiftly, a startup loan can be very helpful. There are few lenders who are willing to help startups with no time doing business, while others might demand proof that you have revenue for a specified time. Since startup loans can be tough to get, small businesses in the earliest stages should consider crowdfunded loans or small business grants as opposed to traditional loans.
2. What is Working Capital?
Working capital is the difference between your businesses current assets and your business current liabilities. So simply put, working capital is the money your business needs to pay for normal day-to-day operations. For a myriad of reasons, you may find yourself in a situation where your business is short of cash and cannot pay for the daily expenses that keep it running. Sales fluctuations, sporadic cash flow, and business growth spurts are just a few of the many reasons why a business can be broke. A loan can help you during such times, ensuring that you keep engaging in the activities that make you money.
3. Can I buy inventory with a business loan?
All businesses, large and small, new and old, commonly seek business loans to cover the cost of buying inventory or raw materials needed to make their products. To satisfy your customers and to keep making money, you need to ensure that you always have enough product on-hand. When you don’t, business loans can help you buy what you need. Retail businesses in particular usually seek loans to replenish stock especially when they expect an uptick in sales during certain seasons. For instance, if you own a small business that sells flowers, you might need a small loan to stock up during Valentine’s day season.
4. Can I get equipment loans for small business?
Almost every business requires some sort of equipment to perform its day-to-day operations. Whether you need a new espresso machine for your coffee shop, a new computer for your graphic design company, or even a new business vehicle, you might need help since some of the important business equipment usually comes at a cost that can be out of reach for a small business. One popular way to purchase equipment for a business is through equipment financing, which is a type of business loan that does not any other collateral other than the purchased equipment.
5. Can I Use a Business Loan to Hire New Talent?
As your small business grows, you will find that there are many tasks that you will be unable to do either due to lack of the required skill or when the workload is just too much. This means that you will need to hire people as you grow. Payroll is already one of the biggest expenses you have in your business and if you add more employees, the cost can be overwhelming. On top of the wages, you have to pay for employee training, health care, and other benefits. Getting a business loan can make it possible to hire more employees but since it’s risky, you should ensure that you get one worth their salt.
6. Should I expand my products and services with a business loan?
As a small business owner, one of your main objectives should be to keep your business growing in order to increase revenues and stay competitive. Sometimes this means expanding your offerings from time to time. For instance, if you own a real estate agency, you can decide to add a property management department to add a new way to make money. Similarly, if you own a burger hotel, you can add pizza as a new product to increase your revenue. This expansion might require getting a business loan.
7. I Need Business Loans to Open a New Location
After starting your small business and being successful at it, you might feel confident that the business can perform well in another location or several other locations. Expanding your business to a new location is a major undertaking that requires a lot of capital, but if you play your cards right, it can pay off tremendously. Getting business loans can help you expand to new locations and grow your brand. Many giant companies we know today managed to grow with the help of expansion loans.
8. I Want Business Loans to Cover Unexpected Expenses
Sometimes your business could be faced with an expense that you had not budgeted for but needs to be sorted out quickly. If you don’t have the money to do it, you could be left with no choice but to get a loan to cover such an expense. For instance, you might have to replace an expensive piece of equipment or have to make repairs after a natural disaster.
9. Can Business Loans Cover Advertising Costs?
Most of the big companies manage to get there and stay there due to advertising. Marketing your business is the best way to get the word out about your products and services in order to attract more customers. Advertising involves commercials, billboards, radio ads, Search engine optimization, making promotional materials, and other activities, all of which can be costly. You might need to get a business loan to pay for advertising costs, especially when you hire a professional marketing agency to handle it.
10. Can Getting a Business Loan Build my Business Credit?
Most small businesses don’t have a solid credit history. Getting business loans and paying in full and on time can help you build your business credit over time which will come in handy in the future when your business needs credit.
11. Can I Use Business Loans to Take Advantage of Business Opportunities?
You may find yourself in a situation where you are presented with a once-in-a-lifetime opportunity for your small business that is just too good to ignore, even if you don’t have the money to pay for it. As long as you are sure that it is a solid opportunity, you can go out on a limb and get a business loan to pay for it. That way, you will never look back and imagine what could have been.
Where Can I Apply for Business Capital or Unsecured Business Funding?
Hard working entrepreneurs are no longer limited to traditional loans from the big banks. Finance Agents helps small business owners find flexible funding options. With multiple business finance programs available, they are able to say YES when banks say NO.