Loan Your Business Some Good Advice

For the man or woman running a smaller business in 2016, there are countless things to be on the lookout for, one if which is how well your finances are holding up.

While there are countless success stories dotted all across this nation, there are also numerous ones that are not as rosy. As a result, those companies can be nearing the red or even in there currently, potentially just weeks or months from having to close their brands down.

With that in mind, is your business doing all it can financially to stay afloat, allowing you to see better days on the horizon?

Cover Your Financial Bases

Given the up-and-down rollercoaster of an economy that many businesses have had to deal with in recent years, a small business loan may be just what the doctor ordered for your company.

If your business is leaning in that direction, make sure to cover these areas:

• Know your finances – First and foremost, do a review of your company’s financial situation. Have you been in the red for some time now? If so, is a loan your only and last resort? Can you turn to family or friends to make a significant investment in your brand? If you borrow money, what kind of timetable do you expect to see/set for yourself in paying it back? Will your credit history (see more below) help or hurt you in trying to secure a loan? These are all areas that you must be able to cover before you opt to go after a loan;
• Know your loan provider – Research the potential loan providers you are thinking of doing business with. For example, how long have they been in business? Do they have any red flags from the Better Business Bureau (BBB)? Do they appear to be financially stable? Have they been getting good or bad reviews on social networking sites? These are all areas of interest to you and your business;
• Know your credit history – Just as more insurance companies and other brands you do business with are looking with more interest into credit scores, it should not come as a big surprise that loan providers do the same. If you have a so-so credit score, don’t automatically assume you will be turned down for a business loan. When individuals look for the quickest cash loans for consumers, they have to know that loan providers are not just going to write a blank check without doing their own research, notably on one’s credit score. Look at what may have gotten your credit score in trouble in the first place. Were you late on payments or failed to make the minimum amount due? Were you opening and/or closing too many accounts over time? Either of these issues, along with some other ones, can lead to an average or even poor credit score. When that happens, your chances for a loan can go down, but they are not removed altogether;
• Know your ability to pay back – With any loan of course comes terms and agreements on how one will reimburse the lender over time. Along with figuring out how you will pay back the loan financially, look around at your business and see where you may be “leaking” money, leaks that could very well have led you to need a loan in the first place. Even though letting employees go is typically a last resort, do you need to think about doing that to get back on track financially? What about the money you are spending on advertising/marketing/supplies? Is there wiggle room there to decrease your outgoing funds? The most important thing you need to do is not become a borrowing machine without knowing how you will pay back the money.

You may make it through your life as a business owner with never having had to take out a loan.

On the flip side, you may end up taking out one or more loans over the course of your business or businesses.

Either way, it is important that you regularly monitor how much money is going out and what the amount is coming in, allowing you to know if a loan is right for you and when the best time for it is.