No-one likes to have to borrow money. Debt is something we would all avoid if we had the chance. However, business debt isn’t necessarily a bad thing. Sometimes, businesses (small and big) need an extra nudge in the right direction. The decision to take on a business loan shouldn’t be a light one, but there can be lots of benefits to a cash injection. It can be especially useful if you feel your business will inevitably fail without it. So, how do you decide if a loan is the right choice for you?
The main objectives of any business are to make money and grow. Sometimes, without a cash injection, that can be impossible. Small businesses often have enough money to pay the bills and keep things running smoothly, but when it comes to new opportunities there usually isn’t enough in the budget for business owners to be creative. So, if a customer approaches a small business and asks for a large order, it may take a small business loan for the business to be able to fulfill that order. Similarly, a business owner may have an idea that could propel the business into a bigger and better stage, but without the money, that idea is useless.
Unlike traditional loans, short-term loans are often in your bank account the same day they’re approved, if not a few days later. Click here to find out more. When you apply for a traditional loan, you’ll often have to jump through hurdles to get it, wait a while for approval and then wait even longer for the money. So, let’s say you’ve been unable to keep the business running because of poor health on a temporary basis. Now you’re fit and healthy again, but you have outstanding bills that could cause poor credit history for the business. A short-term loan can pay off your bills, give you the time to earn the money you need from the business and give you peace of mind.
You Already Have Buyers
If you’re thinking about introducing a new product or service to your business, a short-term loan could be ideal. This is especially true if you’ve already done your research and know that buyers will be lining up. If you know you can sell quickly, you know you can repay quickly. That means a short-term loan is better option for you than a traditional loan. Additionally, paying the loan off quickly will boost the business’ credit portfolio in case you need to borrow money again in the future.
If a customer refuses to pay you for your work because of a dispute, it could mean that your business and your staff suffer. If you don’t bring in the money you need, you may be forced to decide between a loan or getting rid of employees. If you know you’re in the right and the situation will be resolved quickly, a short-term loan could cover your back and save you from losing valuable members of your team.
Remember, it isn’t wise to accept the first loan offer you’re given. Do some shopping around and get the best deal for your business.