It’s a catch-22 – you need money to run a business but you need to get more business to make money. As the saying goes, “You need money to make money.” So what can you do if you don’t have working capital to grow your business? There are a lot of options to get business funding for your small business. You just have to do a little research and consider the following.
Small businesses generally seek funds for a few reasons: (1) purchasing new inventory; (2) strengthening their firm; and (3) expanding their business. Alternative lending makes up about 75 percent of small business capital. But with all the options available, what is the best choice for your business? Before considering small business loan options, you need to ask yourself a few things.
What do I need the business funding for?
Different types of business loans are better for different needs. If you are looking for equipment for a new project, you may want to consider equipment financing. This option allows business owners to keep cash flow from depleting, and many small business owners turn to equipment loans even if they have sufficient funds to purchase their own equipment.
Maybe you are looking for a quick fix. You owe money to vendors or you have unbudgeted fees or purchases that need to be paid for. You may want to consider a merchant cash advance for your small business. It’s a quick and easy business funding option that will provide you with the working capital you need even if you have bad credit. It’s a great short-term business financing option that is flexible to match your needs.
“Expect the unexpected,” some say. Expanding a business comes with risks; risks that your first location will lose sales or that your new location won’t be as successful as you’d hoped for. If you are planning to expand your business and happen to be one of those business owners who like to plan for the unexpected, then having extra capital for cushion might be beneficial. In this case, you might want to look into a small business loan.
Do you have a time-sensitive opportunity to grow your small business? Well, another advantage of alternative financing from Business Financial Services is that you can get funded within days instead of waiting for months to get approved for a bank loan.
One of the most important aspects of getting business funding is considering how the additional capital will help your business grow. For example, if you run a retail business and have an opportunity to buy out a competitor’s inventory at a deep discount, then you should seriously consider getting a business loan to take advantage of this opportunity to make more revenue. Or if you have a successful restaurant business, a small business loan from BFS can help you renovate your premises and add more tables to be able to bring in more customers. Or let’s say that you own a construction business that just landed a big contract. With a business loan from BFS, you can upgrade your equipment and hire new contractors to accommodate your construction business’ increased workload.
Just ask yourself, “How much money can my business make in the future by getting additional working capital now?”
How much business financing do I need?
Are you working on a big project over a long period of time? Or are you more focused on smaller, short-term, day-to-day tasks? You want to come up with a budget that forecasts (as best as possible) your business’ financial needs. You obviously don’t want to borrow too little, but you also don’t want to borrow too much. Consider the payback terms before choosing the financing option that works best for your business.
When will I be able to pay this business loan back?
You need to have a plan when you’re asking someone to invest in your business. Because, yes, it is an investment for whoever is loaning your business capital. They are putting their trust in you that you will pay them back. No one is going to just hand money over to your business. You should discuss with your business lender how much funding you need, what the capital will be used for, and how you will be repaying your debt.
Different business loans have different terms. You may want loan options that have flexible repayment terms that adjust to your daily cash flow like a merchant cash advance. If you prefer making fixed repayments, then a small business loan may be a better option for your business.
Seeking business funding for your small business doesn’t have to be difficult. As long as you take some time to understand what you really need, how the capital will help your business grow, and figure out a plan on paying it back, you will be more than okay. Most importantly, consider how you can grow your business with additional cash flow. If a financial push will get your business to the next level, then a small business loan from Business Financial Services may be right for you.