How can a Business Loan help maintain, grow and save your business?
As the owner of a small business, taking out a loan can be one of the biggest decisions you will ever make. That is why it is important that you have all the facts to make the best decision possible.
Whether you are taking out a loan to save, maintain or grow your business, it is essential that you know everything and have all the facts.
Why Do I Need A Business Loan?
First and foremost, you need to decide the reason you want to take out a loan. Do you want to expand your already successful business? Invest in larger premises? Do you need more working capital?
Do you need funding to maintain your already stable business? Maintaining stability and avoiding fluctuations, particularly in cash flow, is one of the hardest things for any small business owner.
Or is your business struggling and you need funding to keep the business afloat in the short term, while your long-term plans are in the process of being implemented?
Before taking out any kind of loan you must consider some or all of the following questions:
- How much money do you need?
- What do you need the money for?
- How long will it take you to pay it back?
- How long have you been in business?
- What is the current financial situation of your business?
- How strong are your accounts?
- How much collateral, if any, will you need to put up for the loan?
- What is your credit score?
- Do you have any other outstanding loans?
- Are you looking for a short or long-term loan?
Understand the information
At this stage, it is important that you turn to a qualified and reputable Finance Broker to guide you through the process and do the heavy lifting for you.
A good Finance Broker will help you answer all the questions mentioned above. They will assist you in obtaining the loan, whilst also ensuring that you have the best possible option for your business at the current time.
Regardless of the reason for needing a business loan, there are some general rules to follow:
Borrowing without a business plan is a recipe for disaster. Get the help of your Finance Broker to create and execute a realistic, data-driven business plan. And of course, your financial projections are one of the most important factors in any plan.
Make sure you have a plan for how you will repay your business loan. Make sure you know how the loan will be repaid. Will it be from the profits of the business? Or perhaps you will sell an asset to clear the loan? The key is to have a repayment strategy.
Never use your business loan to pay off debt that has nothing to do with your business. Although it may be tempting to use liquid assets to pay off personal debt, this is never a good idea. Keep your personal and your business finances separate.
You need to make sure you know the reason for borrowing in the first place. If for instance, you need money to survive and do not really know what the loan is for, or how it will be repaid, then borrowing will only be a short-term solution.
Taking out a loan is an important decision. So, before you sign on the dotted line, make sure you talk to an experienced Finance Broker. Someone with ‘hands-on’ experience who can give you insights you may not be able to get on your own.
Funding Track are a specialist Finance Brokerage with over 25 years experience. We know how business works and also understand that every business is different. We know that when it comes to funding there is no “one size fits all”.
We will assist you in finding and obtaining a business loan that best suits your individual needs and requirements. Contact us today to find out how we can help you get your business on the right track.
Contact Funding Track today to find out how we can help.
T. 020 3857 3030