4 common reasons to consider taking out a small business loan

There are typically multiple steps involved in launching and maintaining a successful small business. From choosing the initial product or service to putting systems and processes in place, reaching your goals can be challenging.

Pre-qualify in minutes

One strategy to try and strengthen and grow your business is to seek the right funding. The old adage is true. It typically does take money to make money in a competitive environment or a challenging economy. If you’re ready to take the next step, consider these common reasons why small business owners may want to consider taking out a loan.

Invest in growth

Upfront capital typically allows a business to scale effectively. Investing in new equipment, staff, or marketing may put a business owner in a stronger position to move forward. The SmartBiz® team recently had the pleasure of helping the co-owners of Anchor Light Therapy Collective® obtain a 10-year term Small Business Administration (SBA) loan. Due to increased demand, the mental health organization needed to grow their business to serve more clients. They used the low-cost funds for staffing, SEO efforts, and a new location. Their solid plan for continued growth is helping them reach future revenue goals.

Manage cash flow

Cash flow is generally the lifeblood of any business, and a lack of cash may be disastrous. A loan may help to provide a small business with the financial stability it needs to weather unexpected expenses or downturns in revenue. Learn how SmartBiz customer The George Group® used funds from an SBA loan to pay off expensive debt. The owner’s monthly financial obligations were greatly decreased, increasing available cash flow for other business building initiatives.

Improve credit

Taking out a loan and making regular, on-time payments may help a small business improve its credit score. A good credit score may help make it easier to secure additional financing in the future and may also lead to better terms and rates on loans. Additional essential habits that may strengthen your credit score include checking your score regularly, not using up too much of your available credit, and having a good mix of credit. Review this SmartBiz blog post for more credit building tips: 7 Essential Habits for Achieving a Great Credit Score.

Take advantage of opportunities

Opportunities may arise at any time, and having access to financing may help a small business take advantage of those opportunities when they do. For example, a loan may help a small business seize a potential new market or make a strategic acquisition. Bryan Tracey is the founder of SkateXS Inc.® He shared how he was able to use funds from a bank in the SmartBiz network to take advantage of an opportunity to save. "Because we’re ordering more, we’re getting better prices and our dollar is going so much further with this additional money. As an example, skateboarding and stickers go hand-in-hand and we include them with every board purchase. I can now buy 5,000 and it’s so much cheaper. Having cash on hand is a difference maker.”

Find the best loan for your small business

Several types of small business loans exist, and choosing the right one can often be a complicated decision. The best loan for your business needs might not be the best loan for another business. However, the financial professionals at SmartBiz can help you determine the best way to fund your unique business now. From an SBA 7(a) loan to a bank term loan to a line of credit, our team is ready to work with you so you can reach your business goals. Visit the SmartBiz website to discover whether you pre-qualify in just a few minutes*.

*We conduct a soft credit pull that will not affect your credit score. However, in processing your loan application, the lenders with whom we work will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and happens after your application is in the funding process and matched with a lender who is likely to fund your loan.

WHAT YOU NEED TO KNOW: The SmartBiz® Small Business Blog and other related communications from SmartBiz Loans® are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. Please consult legal and financial processionals for further information.

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