When is the right time to get a business loan?

Knowing when is the right time to get a business loan can be a challenge for all business owners. Whether you’re looking to get finance for the first time, or trying to judge when to get further funding, there are many things to consider. In this blog we look at the key drivers for taking on finance, the top concerns business owners have, and some practical tips for judging the right time to get a business loan for your business.

The right time to get a business loan – investing in your future

From new projects and expansion, to stability and security, there’s lots of reasons to invest in your business. Here are some key drivers that can decide if now is the right time to get a business loan.

Lack of investment is holding you back

There comes a point for every business where you reach maximum capacity with what you have. You know there’s more potential in your business, but you can’t get there alone. Extra funding can help you buy stock to fulfill more orders. New systems and equipment can improve efficiency and profit margin. Extra working capital can help you improve relationships and negotiate better deals with suppliers.

Knowing there’s a tangible advantage to be gained is not only a great sign it’s the right time to borrow, but will also improve your chances of success when you apply.

Invest to take a new opportunity

Sometimes it’s not an existing internal factor, but an exciting new opportunity that makes it the right time to get a business loan. Such as the perfect location for a new store becoming available, or you’ve landed a new contract and you need funds to fulfill it.

Whatever the new venture may be, finance is often crucial to taking advantage. At Funding Circle you’ll get a decision on your loan application typically within 48 hours, so you can move quickly to seize your chance.

Your business has plateaued

Alternatively, you may have exhausted the potential in your current market and you need to diversify to keep moving forward. Now is the right time expand into a new market, start a new product line, or open a new sales channel to reach a new audience.

If you’re operating efficiently but growth has plateaued, that’s another key indicator that it’s the right time to get a business loan.

The right time to get a business loan – top concerns

Now you’ve established a clear motivation for borrowing, it’s time to consider whether it’s the best option for your business right now. Here are some of the main concerns business owners have when considering finance.

Can I afford it?

It’s important to get a clear understanding of where your financials are at today. If you don’t have an accounts team, there are a host of apps and that can help you manage your accounts, giving you up-to-date information to help you make informed decisions. 

Many businesses apply after they’ve filed their year-end accounts, so they have a full picture. However, if you’re confident you’re in a position to borrow there may be no need to wait.

With our loans you can get a free, no obligation quote in just a few minutes, so you can assess your options. All our loans are also fixed rate, so you can plan with confidence.

Read more about managing your business finances.

Uncertain market conditions

Businesses are currently contending with Brexit negotiations, inflation, currency fluctuations and more. The reaction for many is to be more cautious, but if borrowing can put you in a more favourable position, it can still be good business sense.

Investing sensibly puts you in a better place to take more opportunities. You can gain an advantage on your competitors and increase market share. Expanding to new markets or product lines makes you less reliant on a particular revenue stream. In short, sensible borrowing can make you more resilient to uncertain times. Remember to ask yourself “Can I afford not to invest?”.

I already have a loan or other debts

Take a look at all your credit options and make sure you’re getting the best value for your business. Consolidating your debts into a fixed rate small business loan could save you money on a business credit card or overdraft fees.

If you have a loan already but are ready for your next step, you may be able to borrow again. Good repayers may be able to top up their loan in as little as 3 months, and many of our customers take our further finance within a year of their first loan. You can consolidate your current loan at the same time, so if you’re ready, now could be the right time to borrow more for you business.

If you’re looking for business finance, you can check your eligibility for a loan in 30 seconds at fundingcircle.com, or call our team to discuss your options on 0800 048 2467. 

No information contained here or on the Funding Circle website constitutes investment advice or a recommendation to borrow money, and should not be treated as such.