One of the hardest things to do in our modern business age is to start (and continually run) a successful small business. The ruthless nature of “big business” in our capitalist society and the financial risk inherently associated with starting your own small business might make the dream of owning your own small business more of a “pipe dream” than something tangible you can achieve. But as of 2019, small businesses generate 44% of U.S. economic activity, so it’s fair to assume that as difficult as it may be, the market is there and there is always the potential of major success.
This has led to a surge of determined everyday folks with smart ideas to try and start their own small businesses. However, with the domination of “big businesses” and a high-stakes market that discusses billions of dollars like it was pocket change, a small business that not only wants to survive, but thrive, might need borrowed capital to achieve that. Could your small business benefit from a loan? Keep reading this blog to find the answer to that question. And if the answer is yes, Online Capital is happy to help, to understand your business and provide it with the financial basis and stepping stone to grow into what you want. Give us a call today.
#1. – Do I Need the Capital?
While this might sound like a “duh” kind of question, it’s a question worth some serious consideration. If you have a specific business growth goal in mind, whether it’s more customers, more products, more efficient service, or something else, you should consider whether throwing money at it will achieve that goal. Take the time to fully understand your goal and what might be limiting your business from achieving it. Instead of paying for more ads, a targeted shift in marketing campaign strategy might give you the extra bit of business you want. Instead of trying to expand to multiple locations, consider what moving your present location to a better spot might do instead.
#2. – What Will I Use the Extra Capital For?
Extra money and resources might not always be the solution in life, but there are a lot of different approaches in the business world that work given the right amount of capital. Whether it’s better equipment and more/better-paid employees that provide better service, or more physical space that allows for greater production and profit, it’s common practice to invest in your business to get it to grow. But only smart and well-thought-out investments will do that, so forming a diligent plan, laying out exactly what the capital will be used for and how the capital will achieve that, is a critical step in utilizing the capital effectively, and actually getting approved for the loan itself.
#3. – How Much Do I Need/Can Afford?
“As much as I can get” is not the best answer for a savvy small business owner like yourself. Small business capital can push your business to the next level, or it can sink it like a rock in a lake. So, after determining what you will need the capital for, you will then need to figure out your overall business finances and plan out the exact amount you will need to borrow, and not a penny more or less. Too high of an estimate will come with higher interest rates and a longer period in debt, while too low of an estimate might curtail the desired effect of the investment the capital is used for, or make you embarrassingly ask the bank for more. Look at your financial situation and business needs realistically to determine the best amount that will support you and your business.
#4. – How Likely Am I to Be Approved?
For any concerns or thoughts about what a small business loan could do for your business, it’s important to consider your likelihood of approval for a small business capital loan first. While it might emotionally hurt to get turned down on your loan application, unfortunately, it can also practically hurt by making it that much harder to get approved on the next attempt. Make sure you understand the loan requirements and expectations from your lender and check out your business credit score. You might have great personal credit and assets, but if your business isn’t paying vendors in a timely manner or is in debt, your poor business credit score might hinder your loan approval process.
#5. – Can I Pay This Loan Back?
While it might sound pretty silly, a number of borrowers kind of forget the fact that they have to pay the loan amount back with interest after a certain amount of time. Seeing the dollar signs and the growing potential of your dream business right in front of you might make you forget about the repayment aspect of a loan, but before you get any small business loan, you should determine your ability to pay it back. Consider all the future possibilities, like if your capital investment doesn’t pay off with enough return, or your business goes bankrupt before the loan period is over, or you make enough money to pay it back in full, early. The more prepared and confident you are in paying the loan back, the more likely you are to get approved and the more effectively and efficiently you will use the capital.
Small Business Loans Online with Online Capital
Running a small business is a difficult task, and while more money might seem to always solve the issue, managing that extra capital responsibly and efficiently is the true secret to getting the most out of your small business. Online Capital is a provider of small business loans to established small businesses all over the country. Qualify for up to $500,000 of credit in a quick and expedited online process. Give us a call today and see how a small business loan can propel your small business to the next level.