Taking out a small business loan is an excellent idea for new business owners who don’t have the cash on hand to their new company up and running, or to take it to the next level. With so many options of how to use your new funds efficiently, it might seem intimidating to choose the best use for your business. Here are the main uses of small business loans, and how they can help benefit you in your new business.
1. Equipment Financing
Almost every new business needs some sort of equipment, technology, or system put in place in order for it to get off the ground and start running. Whether you need a big brick oven for your pizza shop, a VOiP system for your call center, or even a new laptop to start your freelance writing career, you need cash to purchase these items. It’s no secret that a brand new 4×4 to carry all of your materials or a few tons of wood to begin your construction business will cost you a pretty penny. A loan for equipment financing gives you the money right there to buy the items needed to actually do your business.
2. Merchant Cash Advance
A merchant cash advance is not exactly a small business loan, but it does give you an advance of money that business owners can use for whatever business expenses they may run into. Like a loan, a lender will advance you the amount of funds you’ve requested, as a cash advance, however, the application and payment processes work a bit differently. There is no collateral needed to get an MCA, no matter your credit score. Also, the cash advance is paid back daily to the lender, as a percentage of your business’s daily sales, along with a fee.
3. Debt Consolidation
Maybe this isn’t your first go at starting up a new business, or maybe you’re being dragged down by loans from other business endeavors you’ve embarked on. Whatever the reason may be, many new business owners find themselves hesitant to try their projects again or to start something completely new because they are already weighed down by past loans they’ve taken out from different lenders. Most likely, these other loans have their own individual interest rates and fees, and the costs can get out of hand, quickly. Luckily, a small business loan for the purpose of debt consolidation is a great way to get all of your affairs organized. With this money, you can pay off all of your other loans, and then have only one to worry about, with one interest rate and one term of payment to one single lender.
Whatever your reason may be, taking a small business loan is a great way to get the cash you need, fast. Don’t let a lack of funds get in your way of creating your dream company. Take advantage of a small business loan today.
Ready to take your business to the next level? Find out more about the right small business loan for you with Onebox Funding, here.