Deciding to pursue a small business loan is one of the biggest decisions a company’s owner can make. With the right approach and a strong plan in mind for using the funds, a small business loan can help an organization strengthen itself and grow, moving upward in a competitive economy.
Of course, choosing when to apply for a loan and from whom are both crucial considerations that have a major impact on the terms of your loan and how effectively your business uses it. Here’s a look at finding the right time to get a small business loan.
A small business loan helps business owners take advantage of opportunities to expand and grow.
When should I seek out a loan for my small business?
As the Small Business & Entrepreneurship Council pointed out, the vast majority of enterprises in the U.S. fit into the small business category, with tens of millions of such organizations across the country. With so many smaller companies and unique needs, it’s important to remember that individual circumstances are crucial in determining when to apply for a small business loan.
However, there are certain periods where many businesses tend to find they could use the boost – financial and otherwise – provided by such a loan. After successfully operating and maturing for a year, small companies enter a period where expansion – as opposed to simple survival – becomes a more practical and attractive option. Many growth-related pain points arise at this level of maturity and, for many small businesses, they continue to exist for the next few years as well.
Consider the many possibilities where a smaller business at this point in the timeline could benefit but is held back by an absence of available working capital:
- A strong customer base can’t be fully utilized because the business doesn’t have the money necessary to stock more inventory or increase production.
- It’s difficult or impossible to hire more workers or extend existing employee hours due to a lack of available funds – even though plenty of demand exists.
- A lucrative opportunity to expand services or offer them in a new, nearby area is hampered because it’s financially difficult to secure the necessary assets and put them to work.
Although some small business owners may feel like avoiding a loan is a prudent decision, it can easily mean missing out on very beneficial opportunities. As long as you have a strong grasp of your company’s finances and a clear plan for how to put the influx of cash to work, getting a small business loan is a responsible, practical and productive choice.
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How a small business loan pays off
There is undeniably a cost involved, but you can easily account for that when deciding if a loan is worth it for your business. With plans that space out repayment of the loan and competitive interest rates, it can be surprising to see how many different ways a loan can be used and provide an undeniably financial benefit for your business. That’s true both as you use the money and, in the longer term, as the loan is paid off.
Contextualizing specific uses for a loan can help you understand where such assistance could help your business. For example, with a small business loan, you could:
- Increase inventory ahead of an especially busy period of sales.
- Bring on additional staff for the same purpose, which ultimately boosts revenue.
- Make practical or cosmetic improvements to a storefront or facility to attract more customers or improve output.
- Give you and your employees the best tools and equipment, meaning more work completed each day.
Understanding the benefits of a small business loan, as well as how your company will use it, are vital points in the process. It’s also critical to consider what to expect as you apply and go through the approval process, along with when you should expect to receive the funds.
What to expect when you get your loan
“National Funding understands how to effectively help small businesses just like yours.”
Depending on the provider, you may receive your loan in as little as a few days or as much as a few months. Approval timelines can have substantial differences in length in much the same way.
When you have a strong plan in mind for using those funds, the last thing you want to do is wait to get the money for what could be a very time-sensitive project. That’s why choosing the right lending partner is among the most important aspects of ensuring your small business loan application and subsequent use of the money have positive results.
National Funding works exclusively with small businesses and prioritizes quick review of applications and delivery of funds. That means we understand how to effectively assist small businesses just like yours. We’ll help you get a loan that means your business can make the most of its opportunities and grow confidently.