Copyright 2016. PEOPLE TRUST. All Rights Reserved.
1. You’re ready to expand your physical location.
Your cubicles are busting at the seams, and your new assistant had to set up shop in the kitchen. Sounds like you’ve outgrown your initial office location. Or maybe you run a restaurant or retail store, and you have more customers in and out than you can fit inside your space.
This is great news! It likely means business is booming, and you’re ready to expand. But just because your business is ready for expansion, doesn’t mean you have the cash on hand to make it happen.
In these cases, you may need a term loan to finance your big move. Whether it’s adding an additional location or picking up and moving, the up-front cost and change in overhead will be significant.
Before you commit, take steps to measure the potential change in revenue that could come from expanding your space. Could you cover your loan costs and still make a profit? Use a revenue forecast along with your existing balance sheet to see how the move would impact your bottom line. And if you’re talking about a second retail location, research the area you want to set up shop to make sure it’s a good fit for your target market.
2. You’re building credit for the future.
If you’re planning to apply for larger-scale financing for your business in the next few years, the case can be made for starting with a smaller, short-term loan in order to build your business credit.
Young businesses can often have a hard time qualifying for larger loans if both the business and the owners don’t have a strong credit history to report. Taking out a smaller loan and making regular on-time payments will build your business’s credit for the future.
This tactic may also help you build relationships with a specific lender, giving you a connection to go back to when you’re ready for that bigger loan. Be careful here, though, and don’t take on an early loan you can’t afford. Even one late payment on your smaller loan could make your chances of qualifying for future funding even worse than if you’d never applied for the small loan at all.
3. You need equipment for your business.
Purchasing equipment that can improve your business offering is typically a no brainer for financing. You need certain machinery, IT equipment or other tools to make your product or perform your service, and you need a loan to finance that equipment. Plus, if you take out equipment financing, the equipment itself can often serve as collateral for a loan -- similarly to a car loan.
4. You want to purchase more inventory.
Inventory is one of the biggest expenses for any business. Similar to equipment purchases, you need to keep up with the demand by replenishing your inventory with plentiful and high-quality options. This can prove difficult at times when you need to purchase large amounts of inventory before seeing a return on the investment.
5. You’ve found a business opportunity that outweighs the potential debt.
Every now and then, an opportunity falls into your lap that is just too good to pass up -- or so it seems, at least. Maybe you have a chance to order inventory in bulk at a discount, or you found a steal on an expanded retail space. In these instances, determining the return on investment of the opportunity requires weighing the cost of the loan versus the revenue you stand to generate through the available opportunity.
6. Your business needs fresh talent.
When working at a startup or small business, you wear a lot of hats. But there comes a time when doing the bookkeeping, fundraising, marketing and customer service may start to wear on you -- and your business. If your small team is doing too many things, something will eventually fall through the cracks and compromise your business model.
Generally, our Small Business Loans offers the following:
Maximum Term: 24-48 Months
Interest Rate will vary between 5.75% - 8.25%
Maximum Amount: Up to $10,000
People Trust understands that for small businesses in general and diverse businesses in particular, finding capital can present a serious challenge. For many, borrowing may seem out of reach.
People Trust is a direct lender, which means there’s no middleman. We offer the flexibility to create small business loans with terms that meet your specific needs as a borrower. Our high approval rates mean that we can say ‘yes’ when traditional lenders say no. You’ll get a dedicated Loan Specialist who has specific knowledge about your industry and will provide you one-on-one personalized service.
According to Entrepreneur.com, there are 6 Smart Reasons to Get a Business Loan. They are:
Providing a financial solutions through community development...