Category Archives: Business Loans

Explore when and why you should consider Small Business Loans.

Small business needs improvements occasionally and it also true that it takes money to make money. Hence, depending upon the type of industry, a small business may involve working capital to reinvest in business by buying equipment, covering marketing and advertising costs, managing cash flow; placing in real estate, etc. However, small business loans can facilitate in financing both the anticipated and surprising shifts in your business and thus enable you to reap high returns.

small-business-financing

Know how Small business funding is a smarter option and taking it can help your business grow:

Buying equipment or machinery

Exceptional business performance may require some or the other improved equipment or machinery to complete the job. At times, having got the required equipment appears insufficient as the costs of unforeseen repairs or replacing of defective equipment can go beyond your planned budget. Additionally, broken machinery can result in delayed services that in turn can ward off your potential customers. Thus, dent the business credibility, gradually. However, when considering equipment, you have options- to buy or to lease it. A straightforward cost-benefit breakdown can help you make a wiser and quicker financial decision. Small business funding, apart from aiding you to deal with equipment costs competently, it also serves to hold your business coordinated with the technical advancements.

Expanding your business operations

If you are aware that your small business is flourishing and it has exceeded your present office location, then it is time for expanding your physical location. However, realize that expanding business means hiring additional staff, increased advertising costs, renovations, etc. If you lack decent funds for such a big shift, you can also consider loans for small businesses for putting in an opportunity to expand. Yet, employ a revenue forecast and determine how the supposed expansion would influence your business before buying a second location for your business. Since purchasing real estate is a healthy business indicator; banks can easily approve your loan request. Nevertheless, if you want convenience and fastness, small business funding from Business Capital USA is your best bet as it maintains your business operational costs undisturbed.

Purchasing additional inventory

Addressing inventory costs is often a challenge for many small business owners. In order to sustain the customers’ growing demand and allow uninterrupted service to them, you constantly need to refill your inventory with ample options. This turns even harder to handle when your small business is a seasonal one such as a retail business. Moreover, buying bulk inventory without even gaining the return on investments can is high-risk. A well-established sales projection can render ease and confidence while making this unmanageable financial move. As a small business, you can make the most by applying for a small business loan prior to the holiday season and repay conveniently with the sales profits from the recurring sales. Thus, opting for small business funding can easily make up for the chief expenses- inventory overheads.

Boosting working capital

Holding a steady cash flow is not possible always. Sometimes, you need extra money to address routine business operations. Cash flow issues can turn more intense when you have unsold inventory, rent, staff, utilities, etc. to deal with regularly. Such a scenario demands small business funding to cover up the working capital requirements until the business’s earning assets recover substantially. Availing loans for small businesses can thus extend the necessary financial cushioning during periods of low sales.

Small business loans can thus grant a greater prospect to retain cash flow throughout the low business season, deal with usual operational costs, compel revenue, compensate for losses, preserve customers, etc. Moreover, it also offers ease of application, speedy online processing, and quick funds transfer.

Looking for a Business Loan? Avoid These 4 Common Pitfalls

Planning to launch your own business? Emerging entrepreneurs and current small business owners come across numerous issues whenever applying for business loans related to credit rating, loan terms, collateral security, and above all, business plan. The key to getting the right business loan at a competitive interest rate is by doing proper research and detailed comparison.

Given below are the four common pitfalls to avoid when applying for a business loan

1. Ignoring Your Credit Scores

Business loans are approved on the basis of credit scores and credit ratings. Reputed credit bureaus such as Experian, TransUnion and Equifax offer comprehensive reports reflecting a complete picture of your past credit history.

Things to do:

  • Review your credit score and reports regularly every 6 months
  • Subscribe to a credit monitoring and alert service
  • Obtain a 3-Bureau Credit Report annual subscription

2. Signing Business Loan Agreement without Reading

In the process of getting a business loan approved quickly, people are known to sign a business loan agreement without reading it properly or completely.

Things to do:

  • Read all the business loan agreements carefully
  • Discuss about terms and phrases that are contradictory
  • Ensure clarity about certain clauses with which you are not comfortable

3. Waiting Too Long for Interest Rates to Come Down

Obtaining the best interest rate for the business loan is important. However, sometimes you have to determine if it is best to lock in the interest rate now or wait for lower interest rate depends on the current global economic conditions, your credit score and timing for the additional working capital required.

Things to do:

  • Choose and compare business loans with least interest rates
  • Determine the best interest rate for your business loan
  • Lock the interest rate before it moves up further

4. Failing to Explain Your Business Plan

Explain your exact business plan in detail to the business loaners and lenders regarding the business concept, execution of plans and generation of profits. The manner in which you present your business plan will be important to the loan approval decision.

Things to do:

  • Provide detail about your goals and execution plan
  • Explain your business plan in detail to generate revenue
  • Include reports and financials supporting your business plan