11 Reasons to Get A Small Business Loan
There are many good reasons to get a small business loan. A range of circumstances from the knock of opportunity to the call of of creditors that may prompt a small business owner to seek out alternate sources of business capital. More often than not, when the terms are right, a loan can be an enabler to you and your business, empowering you to grow, restructure your finances or weather a difficult period. Below are the top 11 reasons to seek out a small business loan:
#1 - Advertising & Promotion
“Build it and they will come,” is unfortunately seldom true. Many Canadian small business owners struggle to source new clients and customers after establishing their businesses, and this can be an ongoing struggle. Advertising and promotion is a necessary investment with potentially transformative returns that can help build awareness of your brand and drive sales.
#2 - Bill payment/supplier payment
Expenses are a reality of running any venture and sometimes, in order to take advantage of an opportunity for new business, growth or expansion, there are costs that need to be managed upfront, before you see a return on your investment. This is where a well-structured, fast small business loan can add some flexibility to your business. If you’ve got a plan in place and are expecting revenue to increase, a loan can be a good way to temporarily afford your bills and payments.
#3 - Cash flow
Cash flow can be a challenge for any new business owner. Managing your inflows and outflows can be made easier with good accounting and forecasting. Even so, there are going to be times when you require some additional capital to get through dry-spells. A loan can be a life-saver if you find your small business in this position.
#4 - Equipment
Equipment is fundamental to the operation of your business. Whether you are a coffee shop or a manufacturer, out-of-date or broken equipment can be costly and impact the quality of your product or service. If you don’t have a reserve of capital on hand, you may want to consider a loan to invest in equipment to either maintain or grow operations.
#5 - Hiring
People make your business work, but expanding your roster can be expensive. A small business loan can provide enough funding to hire on an extra employee, which in turn can result in increased productivity, sales and ultimately, revenue so you can repay your loan.
#6 - Inventory/Sourcing
When it comes to inventory and sourcing, small business owners sometimes find themselves in a bit of a “chicken and egg” predicament. Of course, you need goods and services in place in order to generate revenue. But then there is the question of raising the capital to make those purchases. It is often necessary in these situations to take on some debt to finance the building out of your inventory.
#7 - Relocation/expansion
Many small businesses will find that relocation or expansion is necessary for the growth or, in some cases the survival of their business, depending on the circumstances. It’s a large undertaking and additional funding is often necessary when moving up or relocating as there are at the very least moving expenses involved in relocating.
#8 - Rent payments
As business ebbs and flows, profits and revenue can be unpredictable. Rent, however, is one thing you can count on if you operate out of an office, workshop or retail space. A flexible loan can be the perfect solution to cover these expenses in a downturn or off-season period.
#9 - Renovation
Again, your small business work space is key to establishing and growing your business. Making improvements and renovations is a great way to refresh your space and revitalize your business. Extra funds are necessary to make these types of improvements. If you’re assured that the improvements will result in future growth and success for your business then a loan is worth considering.
#10 - Tax payments
Tax payments can sneak up on you and it’s not unusual for small business owners to find themselves needing fast access to cash to appease the taxman. As long as you find your business will be successful in the future, tax payments can be afforded using a loan.
#11 - Training & development
These days, it’s highly important to be an industry leader and stay on top of developing trends and innovation. Obtaining funding for training and development for you and your staff is a great way to ensure this. As a small business with a small workforce, it is even more essential that your team be as competitive as possible.
While there are many reasons to seek business capital in the form of a small business loan, the above mentioned are some of the most common. In general, unexpected payments, cash flow challenges or debt consolidation are all common drivers. On the other hand, opportunities such as growth, expansion and development are about making smart, well-calculated investments that you believe will result in greater returns in the long-run.
Written by Lendified
A branch of BusinessAllianceConsulting.com