2019 August

Starting or running a business takes money, plain and simple. Working capital, and lots of it, is required for paying off all types of business expenses. Whether its paying employee wages, stocking up on inventory to sell, or just staying afloat with maintenance if you don’t have cash, you won’t have a business for much longer. Of course, just because your company is not profitable yet, or maybe you are just starting and you don’t have the cash to get your feet off the ground, doesn’t mean you cannot move forward with your business goals. Many successful small business owners opt to take out a business loan to get themselves the funding they need to make sure they can cover all of their expenses. In most cases, getting funding from a lender is possible if you meet certain required criteria that they are looking for (good credit score, a record of steady cash flow, etc). However, there are cases where you should NOT take out a small business loan because it might prove to be even more unhelpful in the end.

Firstly, if you do not meet the requirements of the lender, you will not be approved for a small business loan. These requirements include at least 12 months of bank states illustrating to the lender that you have had some sort of steady cash flow throughout your past year of business (even if your revenue goes up and down over different seasons), a decent credit score (which shows the lender that you are on top of your payments), and your most recent tax return (which assures the lender that all of your taxes are in order).

Assuming you do meet all of the requirements, there are still a few red flags which tell you that you are not in a good position to take out a small business loan, even if you do qualify. One of the biggest red flags that tell you taking out business funding is a bad idea is your income-to-debt ratio. Debt is a natural thing to happen to most companies, especially if you have taken out loans before, or you’ve made purchases bigger than your current profits could pay for. However, there is a point where you have so much debt that you cannot possibly pay off yet another loan.

The rule of thumb here is to make sure that your income-to-debt ratio is less than 50%. If your debt surpasses your income, so that you have more debt than you do money coming in, you are in a very bad situation. Taking out another small business loan, even if you want to use the funds for bumping up your business, will most likely end you up drowning in even more debt. If you find yourself in this kind of situation, you are better off waiting with yet another loan, and instead, trying to find ways to cut back on expenses and get your existing debt down as much as possible. Once you find yourself afloat once again, you will be in a much better position to take on another loan to make your business dreams a reality.

It’s no secret that every business needs working capital, aka cold hard cash, to run and stay afloat. That being said, not every successful business owner has the funds to take care of all of his company’s needs and to keep it steadily growing. Often times, business owners and entrepreneurs opt to take out funding, in the form of a small business loan, in order to make the necessary purchases needed to run their business and keep it up-to-date.

Most of the time, a business loan comes to you in the form of cash directly deposited into your account, so you have free reign to do whatever you please with it. However, you should always have a plan and a goal in mind when you begin to use these funds to help your company. Otherwise, you will find yourself indebted to the lender, with a failing business to boot. Here are some of the best ways to put your small business loan to good use:

1. Hiring and Training New Employees

Scaling your business means making every aspect of it bigger. This includes the number of people you have on your team making the whole thing come together. Of course, with growing your business comes many expenses, so it can be hard to find the cash to covers the growing pains AND the new employees you’ll have to hire to keep up with it all. If that’s your biggest pain point, use your business loan funds for the first few months of salaries for your employees, until your larger revenues will cover the costs for you.

2. Get Yourself Online

Every day, we learn more and more towards technology and away from the physical world. That’s not to say that your brick-and-mortar company is in danger, per se, but it’s always important to keep up with the times. If you don’t have a website, or you do but it’s not optimized and user-friendly, use your small business loan money to hire a web developer to make you a beautiful site with a clean interface. This will give your customers an option to purchase your products online, from the comfort of their homes, which will increase your revenues a great deal.

3. Consolidating Past Debts

Most business owners are no strangers to debt, and it’s very likely that you may have taken out a loan or two in the past that you are still paying off. Save yourself a headache, and some money too, by consolidating all of your loans into one. This way, you’\ll no longer have to deal with multiple interest rates, payments terms, and due dates.

Ready to take the first step to reaching your financial goals? Click here for a FREE quote from Onebox Funding, and find the best loan with the lowest rates, today!

It’s no secret that every business needs working capital, aka cold hard cash, to run and stay afloat. That being said, not every successful business owner has the funds to take care of all of his company’s needs and to keep it steadily growing. Often times, business owners and entrepreneurs opt to take out funding, in the form of a small business loan, in order to make the necessary purchases needed to run their business and keep it up-to-date.

Most of the time, a business loan comes to you in the form of cash directly deposited into your account, so you have free reign to do whatever you please with it. However, you should always have a plan and a goal in mind when you begin to use these funds to help your company. Otherwise, you will find yourself indebted to the lender, with a failing business to boot. Here are some of the best ways to put your small business loan to good use:

1. Keeping Up With Your Equipment

Unless your business is completely run online (and even if it is, this could still be relevant), you will eventually need to spend money on equipment. Whether it’s to fix a damaged machine or repair a broken appliance, or simply because you need the newest upgrade in order to keep up with the competition, your business loan funding could be very well used here. Making sure that you have access to the newest, most advanced equipment in excellent condition is imperative to keeping your business running as efficiently as possible.

2. Marketing Yourself

Even if you have come up with the most innovative and unique idea ever made, without marketing, absolutely no one will know you even exist! If you don’t have the funds or the revenue to take care of your marketing, using your loan here is a good idea. Marketing yourself effectively can mean the difference between being a nobody and having to fight off the paparazzi of clients at your door.

3. Buying Inventory

In order to open up a store, whether brick-and-mortar or a physical shop, you will need to purchase large amounts of inventory for you to sell to your customers. While the goal is to eventually buy it at a cheaper price than what you will sell it for, the fact remains that buying bulk inventory can take a pretty hard hit on your wallet. Instead, use your small business loan funds to purchase the inventory you need for however long of a season you wish to sell for. Hopefully, your revenue from the sales will leave you with enough money to buy the next round without taking another loan.

Ready to take the first step to reaching your financial goals? Click here for a FREE quote from Onebox Funding, and find the best loan with the lowest rates, today!

There’s no shame in receiving some funded to give you a leg up in your business. In fact, most business owners have taken out, or will take out, at least one loan to help give themselves a boost and supply themselves with immediate working capital for their company’s needs. However, taking out a business loan is not as simple as it sounds. Here are some major DO’s and DONT’S when it comes to taking out a small business loan.

DO all of your research to find a reputable lender

It might sound obvious, but it is vastly important to use a lender that is well-known and who has good reviews. Although the lender needs to be able to trust that you will pay his or her money back, it’s just as important that you can trust that he or she gives you honest, reasonable terms, and doesn’t have any secret loopholes that might get you into trouble.

DO get multiple quotes

It’s always a good idea to get a second (or third) opinion, and that goes for a business loan as well. Even if you think you might have found the small business loan for you, you should always get multiple quotes to compare to one another, and you might just find out that you almost missed a better rate. With any big purchase (even if it’s only lent money), doing a double or triple check, is never a waste of time.

DON’T take out more than you need

On the one hand, you should always take out as much money as you need in one loan, instead of taking bits of cash here and there (that will leave you with multiple interest rates and payment terms to keep track of). However, while you should take as much money out as you need, you shouldn’t take any more. This doesn’t include a small, calculated buffer amount that you might need for unaccounted expenses. But it is a bad idea to take out a big surplus of cash to use on unrelated expenses, which could land you in hot water when it comes time to pay them back.

DON’T use your loan for non-business related expenses

When you’re handed a large lump of cash at once, it might be tempting to use some of it to finish up your car payment or help buff up your vacation a little bit. Don’t do it! To keep yourself organized and out of monetary trouble, you should use your business loans for business expenses only. If you find that you need more money for your personal expenses, you should look into a different option for funding, that’s more geared for personal use.

Ready to take the first step to reaching your financial goals? Click here for a FREE quote from Onebox Funding, and find the best loan with the lowest rates, today!