Starting up a company is a difficult balancing act. On one hand, you want to make sure word spreads about your company, and you need to have the capital ready for that influx of business. On the other hand, going into debt when you are unsure of your future cash flows can really be a mental deterrent from succeeding in the business world. It is important to find the balance between the two. If you are starting a business, it is almost always necessary to look into a small business loan. Without that startup capital, it will be difficult to invest in marketing, equipment, rent, etc. while you are struggling to turn a profit in the early days. At Brass Financial Group, we are here to help you determine whether or not taking out a small business loan is the right option for you. Below, check out some of the most common reasons to begin small business financing, and if these apply to you, it may be wise to consider borrowing the capital you need.
1. Seasonal Inventory Issues
If you run a seasonal business, stocking up prior to the busy season can be a huge financial burden. You have to buy all these products before the customers purchase them, putting you in large amounts of debt until customers begin to offset these costs. By taking out a loan to pay for inventory, you can worry less about being strapped for cash before the season starts, and worry more about bringing in the most customers possible.
2. Accounts Receivable Issues
If you have many vendors and clients that you issue invoices to, the chances are you have to wait a long time to receive the money. In the meantime, the daily operating costs of your business have not changed (rent, wages, equipment, etc.) This crisis often leaves business owners scratching their heads figuring out the best way to maintain day-to-day operations while waiting for these large chunks of income to come in. If that is the case, an accounts receivable loan may be right for you. By financing your accounts receivable, you can maintain daily operations without wondering how to come up with the money.
3. It is Time to Expand
A growing business means growing costs. If costs stayed the same forever, every single business owner would be a billionaire. What separates those who grow and those who remain stagnant is figuring out how to balance getting more profit, while also attempting to expand. Expanding requires more advertising, staff, and perhaps even more property. These growing costs can be a detriment to an expanding business. By taking out a loan to cover the costs of expansion, you can continue to grow without going into your daily operating funds.
While these are just three examples of when it makes sense to use a small business loan, there are countless more. If you are a small business who needs cash quick, a loan makes sense. At Brass Financial Group, we have a number of No Doc Small Business Loan programs to best fit your unique needs. If you are interested in learning more, head over to our Small Business Loans page, or call us at (609) 800-FUND to speak with a loan expert.