Access to affordable working capital is a concern that faces many small business owners. At one time, bank loans were the only viable option for some small business owners and the majority who didn’t have the sufficient collateral to get approved. Many small business owners resigned themselves to running their business without additional working capital—but the lending environment has changed over the past decade. Now there are multiple, affordable options for Main Street businesses to choose from when it comes to financing—with higher approval rates, too. So don’t allow the lack of accessible working capital put the brakes on your company’s growth.
With that in mind, we’ve put together some of the biggest signs of why your business needs financing:
You’re using your personal savings to grow your business
Small business owners pour their livelihood and time into their business—and that means using personal savings to grow your business. One of our customers, a restauranteur says it’s a very common situation, “We all know what happens when you invest family money in your business—it’s incredibly difficult to pull it back out, even when your business is making money you tend to invest it back into your business rather than repay yourself or your family.” Taking out a loan for your business allows the benefit of the financing to repay the loan—so you don’t have to, keeping your personal savings just that—personal.
Business is booming!
When your business is doing well, it means your hard work is paying off, and your business is healthy. It’s the perfect time to grow, and puts you in an enviable position; you can shop offers and pick the best financing option for you. How could additional cash flow help your business grow—is there room for expansion, possibly a new location? Could you benefit from upgrading outdated equipment, technology, fixtures, or expanding your inventory? How about additional marketing or advertising? Ask yourself what is possible, and don’t let money shut the door to any of these options—lenders want to lend to healthy businesses. Reputable lenders will never lend to a business they don’t believe cannot pay them back. A healthy business is the safest option, and as a result, you’ll enjoy their lowest rates.
Hiring additional staff
As you continue to grow your business, you will inevitably need to hire new employees along the way. As a business owner, you already know that one of the largest expenses for any growing business is staffing cost. As you sit down and figure out how much you can afford to pay them and where in your budget you can do this, don’t fall into the trap of cutting from other areas. A better business solution is available by seeking funding initially to assist with this expense. This extra funding will allow you to focus on who do you hire, who do you trust your business to because you’ve worked so hard to build it.
Is your business starting to look worn out?
Wear and tear on a business can be a turn-off—even to your most loyal customers. Investing in updates keeps your business looking fresh and is alluring to new and returning customers. Instead of holding off modernizing your business, securing the short term financing you need is a smart business decision.
You have a specific idea/need
You’ve had an idea of how to grow for a while now, and you’re finally ready to act. Rather than dip into savings, financing is a good option. It allows the business to pay for the loan, allowing you to keep your cash reserves for a rainy day. The idea behind this is that your business will grow as a result of the financing—and that added growth will pay for the loan. For short-term benefits, such as an opportunity to buy additional inventory, merchant loans are ideally situated for this. Since merchant loans have short terms, the business will be able to pay off the loan during the lifetime of the benefit. Meaning, your business won’t be paying off financing, long after the benefit has run its course.
Growing your business takes strategic thinking, strong leadership, and advance planning. The key to your success is knowing when additional financing is right for your business. At BriteCap, we are here for you every step of the way.