Taking out a loan is a big decision. Many business owners choose not to pursue loans due to strict regulations and excessive interest. Those businesses in the high risk industry especially have a difficult time acquiring loans at reasonable rates. So when is a loan a good idea? The following is a list of the 5 best times to consider taking out a loan.
- Problems with Staffing, Equipment, or Inventory – Functional and modern equipment is important to any business. Sometimes unexpected issues arise with this equipment. In order to keep business processes on track, equipment errors must be fixed quickly and this could require fast cash. Perhaps equipment isn’t the issue. Maybe the business is doing so well that vendors simply can’t keep up. Sometimes owners need an influx of cash to make bulk orders of popular products to sell to customers. Of course as a business grows, so does its need for employees. But hiring new employees simply may not be in the budget. Acquiring a loan to pay for staffing is advisable. The company should see an increase in profits as a result of their new hires.
- Working Capital – Working capital is used for day-to-day operations like payroll. It is the most fluid of your assets that is immediately available to be used for any issue that might occur.
- Emergencies – Whether it’s a pipe that bursts or critical inventory that goes missing, every business should have some emergency cash handy. When the unexpected happens, short-term loans that can be secured within hours are helpful. The SBA offers a Disaster Loan Program with lower interest rates for companies that qualify.
- Build Business Credit – Building credit is very important, especially for a young business. It can determine the size of any future loans you can acquire, and affect the interest on the loans and loan terms. A good way to build credit is to take out a small business loan, pay it down, and pay it down on time.
- Expanding the Biz – Are you ready to expand your office space, open another location, or have a huge marketing campaign? Taking out a loan is a great way to avoid dipping into personal funds or working capital to grow. Usually lines of credit or banks offer fantastic deals for expansion purposes.
FAM is a leading supplier of loans for small business. Expert advisers are available 24 hours to assist merchants anywhere, anytime. FAM specializes in small business funding for all types of companies with good or bad credit. Start your application today and experience the joy and profits of fast, low hassle lending today.Get Started Now