Are Small Business Loans Right for Your Business?

Small businesses require unique flexibility when it comes to financing. The right small business loans can see you through a difficult season or secure essential supplies, while taking out loans for the wrong reasons can set you back indefinitely.

Here are a few guidelines to help you decide if you should be considering a small business loan.

Good Reasons for Taking Out a Small Business Loan

Is it time to expand?

Maybe the future is so bright your small business needs shades. If you can’t continue growing without more real estate or adding employees, definitely look at your business loan options. Having even a few years of a documented growth should help you secure a favorable rate.

Is it time for new equipment?

If your business relies on functional, up-to-date machinery or technology financing to remain relevant and productive, it makes sense to look at some of the small business loan lenders offer. Just make sure your increased productivity can reasonably cover the cost of paying back these sorts of loans.

Is it time to stock up?

Some businesses are seasonal by their nature. Summer is coming and the tourists are already trickling in, and you know if you had enough beach towels, sunscreen, or novelty t-shirts in stock they’d fly out the door. If you know what’s coming and wish to be better prepared, seasonal small business loans might be just the thing.

Is it time to begin building up credit?

You don’t want to borrow money just to borrow it. But a small cash loan now, while you’re in a good position to repay it, might be a good first step towards raising that credit score. Then, down the road, when you need a more substantial loan, you’ll have already paid off several smaller loan offers to small businesses like yours.

Even personal loans to start a business can become a starting point if you’re trying to qualify for the sorts of small business loans can complicate. You want to be particularly careful with these, however – there’s no point further harming your credit score by being unrealistic. Keep amounts manageable and payments consistent as you build your credit.

Recognizing Trouble- Small Business Loans

On the other hand, sometimes we need to take a hard look at the realities of business and separate entrepreneurship from recklessness.

Are you regularly falling behind?

Maybe your business model should have worked, but just doesn’t seem to be gaining traction, despite your commitment. It’s important to have dreams; I wish more people were like you. America is a nation full of risk-takers. But there’s no shame in recognizing when something’s not working. Take a step back and re-evaluate before going after another line of credit.

Have circumstances changed?

Sometimes unexpected events change the game or thwart our best-laid plans. If life were a fairy tale, we’d plow ahead no matter what the situation and things would work out magically in the end. Our struggles take place in live action, however, and sometimes circumstances change too quickly for us to come out on top – at least this time.

Are your eyes bigger than your stomach?

That’s what my mother always asked me when I was a kid ordering off the menu during our rare trips to a “sit-down” restaurant. She was worried that my “ambition” (or at least my appetite) was outpacing my ability to chew and digest everything that was coming. Usually, she was right. The same drive that allows you to become your own boss can push you to reach too far. It’s not always easy to tell the difference, but it’s worth having a long, serious talk with yourself before adding further debt.

If you’ve weighed the circumstances and decided it’s time to consider, we can help you find a business loan lender. We’re ready to help you sort through the different types of long-term business loans (or other types of loans) and connect you with direct lenders who want to partner with you. Just let us know.


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