Tag: expansion

Small Business Capital Can Help Grow Your Business

Small Business Capital Can Help Grow Your Business

Determining how much working capital you need to operate and expand your business can be challenging. You need to consider the type of business you’re in, your operating expenses, your sales cycle, and your plans for future growth. Once you have taken these factors into consideration, you need to figure out how much working capital you need to accomplish your goals. Not having enough working capital can prevent you from growing your business, and at worse, your business can go bankrupt. Knowing how much working capital you need is critical to the profitability of your business.

Small Business Capital
Working capital is simply the difference between assets and liabilities, and it’s a reflection on how efficient you are in running your business. Assets include bank accounts, inventory, real estate, and computers while liabilities include rent, debt payments, taxes, and the cost of materials and supplies. If your liabilities are more than your assets, then you will not have enough working capital to make payments on your liabilities. It can also make it hard for you to get a small business capital loan from a bank to get the money you need to grow your business. Banks prefer lending to businesses that have more assets than liabilities in addition to having high levels of working capital.

Small Business Capital Requirements for Businesses
All businesses require different levels of working capital. Businesses that need to carry physical inventory like retail stores, wholesale businesses and manufacturers have higher working capital requirements. This is because retailers and wholesalers need the working capital to purchase products to sell to their customers, while manufacturers need working capital to purchase the raw materials to make the products. Businesses that provide consulting, advertising, educational tutoring, or other intangible services have low working capital requirements because they do not have to produce and store inventory.

Business Expansion
If you want to grow your business but you don’t have enough working capital, then you will need to get a working capital loan. Banks are a traditional source of working capital, but they have tight lending requirements, which makes it difficult to get a loan. There are plenty of alternative online lenders like crowdfunding and peer-to-peer lending sites who can provide fast access to working capital if you do not meet bank loan qualifications. Other sources for small business capital include credit unions and the SBA. Even if you are not looking to expand your business, having plenty of working capital is vital if you want to stay in business.

4 Reasons You Need A Small Business Loan

4 Reasons You Need A Small Business Loan

Online small business loans can offer advantages for your business enterprise. You can use the money to buy new equipment, expand your services, or invest in a new technology that will give you a competitive advantage. Some believe that taking a loan can be risky, but if you know what you’re doing and apply the funds judiciously, it can take your business to greater heights.

You Need a Loan To Acquire A Bigger Location

Physical space will eventually become an issue as your business grows. You may need to get online small business loans to purchase more space or change to a bigger location. A larger working space will have an impact on your employees and their level of productivity. You also get to attract new customers when you move to a new location, especially if you moved to an area populated with people earning higher income.

Get Loans To Build Credit

You need to start applying for short term loans now if you plan to access large scale loans in the future. Most businesses that apply for large loans mostly don’t qualify because they don’t have a history of getting loans and repaying. Your repayment history counts for about 35% of your credit score, which means it is not about the money you are borrowing but how well and often you can pay back.

Your Business Requires Fresh Talent

The difference between you and your competitors might just be a new talent who brings in fresh ideas. As a small business, you can apply for online small business loans to hire fresh talent to your company. New talents come with new ideas, are ready to take greater risks, don’t engage in office politics, and they have a natural aptitude for technology.

There Is An Emergency

Your business just experienced a surprised emergency, and you don’t have the cash to deal with it. Taking a loan in this situation is a smart move as it can help reduce or eliminate the adverse effects of such situation. As a small business owner, you should always have money somewhere you can rely on in case of emergency.

Running a small business can be exciting and at the same time very challenging. You need to equip yourself with all the knowledge necessary to survive and beat the competition. Be smart. Apply for a loan if you need to change location, expand your business, get new equipment, build credit, or buy inventory.