As entrepreneurs, I’m sure we’ve asked ourselves this question many times especially when you’re in the start-up stages of a new project or joint venture. I think people try to instill fear in getting a business loan, just because others were not able to make use of the capital effectively does not mean the same will happen to you. That’s why in this article, I’ll be going over some of the pros and cons that can help determine whether a business loan is right for you.
When Is The Best Time To Get A Business Loan?
When growing your business understanding that your sales are the holy grail of determining how much capital you’re eligible for and what your interest rates will be. When you’re business is demonstrating consistent growth with healthy cash flow, then the odds of getting approved will work more in your favor every time.
Reasons Why You Should Get A Business Loan
- To invest in assets that will increase your revenue like machinery or tools, and when making these purchases with cash is not likely the best strategy because it will tie up the funding you need for the business. So using a business loan to make a wise investment to acquire incoming producing assets would be a better strategy this way you don’t commingle the funds.
- To expand your organization a business loan is a great option especially if you work in an industry that’s in demand and growing. This way you’re not draining capital from the actual business in order to pursue the expansion, and depending on the lender and your business credit score you may be eligible for a business line of credit that has no personal guarantee.
- It can help build your business credit score. Using the business line of credit strategically can help your business access capital more frequently and with less hassle. Also communicating with your lenders to make sure they’re reporting everything to the credit bureaus: Experian, Equifax, and Dun & Bradstreet
Reasons Why You Should Wait To Get A Business Loan
- Don’t get a loan if you’ve maxed out all of your credit lines already. When you’re using most of your available credit it will ultimately raise your credit utilization ratio, which will negatively impact your credit score. Therefore making it difficult for you to get a business loan, so always take on strategic measures in paying down your current debt before seeking more debt.
- When some of the loan options do not suit the terms that you are seeking. When you’re shopping for business loans, if you can’t get approved for terms you are seeking then it’s a clear indicator to put things on hold and invest some time in building your personal and business scores.
Get A Loan?
When making your decision always do your homework prior to applying, this way you can set financial goals for you business. There are a lot of benefits when using these loans, it can save your business from a slow season and buy the equipment you need to multiply your business’s efforts and increase revenue. At SourcifyLending we provide business owners with options with top lenders to ensure we get you the most competitive rates in the market. All you need to do is fill out our one-page application, provide 3 months of your business bank statements and we’ll have an offer for you the very next day. For any questions send us an email at support@sourcifylending.com