It’s a recurring mantra among small business owners: “Borrowing money is bad.” Small business loan debt was considered the enemy, an albatross that hung on the neck of any entrepreneur foolhardy enough to walk down that path.
In recent years, however, that view has evolved. Faster and more flexible financing options have helped business owners increasingly see debt as any other business tool: a way to meet their goals faster, and make a bigger impact sooner.
Still got doubts? Here are the three surprising perks of small business loan debt.
You started a small business because you had a project, idea or product you wanted to get out into the world and make a difference. Without the proper resources and funds, you can’t expect your business to grow and continue to generate revenue.
Small business loans can help accelerate your growth and overcome challenges such as:
Your current capital can keep your business chugging steadily along, but to increase production and scale your operations, you’ll need to inject capital to fuel growth.
For example, Eyal Levy had built Yogibo, a line of comfortable furniture, into a profitable business. His plans for growth were stunted, however, when banks would not provide him with the capital he needed. In their minds, his firm did not have enough of the right type of collateral. Undaunted, he secured a small business loan from Funding Circle, because he knew his precise capital needs and could show how he would build revenue and profits with the funds.
Often an entrepreneur can spur initial business growth with sheer energy and force of will. At a certain point, however, you need capital to grow and stabilize. Determining your capital needs is a good exercise in goal setting, discipline and forecasting.
Knowing your capital needs also forces you to clarify your goals and helps you avoid making rash decisions on the fly. Ask yourself:
Answering these and similar questions will help you become more efficient and effective as you hone in on specific growth targets – and help make sure you never take out more financing than you really need.
A small business term loan gives you peace of mind by mitigating month-to-month challenges like tight cash flow resulting from slow accounts receivables. Healthy cash flow is vital to all stages of launching a new business but becomes especially important during stages of growth and expansion.
Long-term business loans offer stability and predictability that other funding vehicles just cannot provide. With a term loan, you get one fixed payment that stays the same month in and month out throughout the life of the loan. A set monthly payment empowers you to plan and budget in advance — with no unpleasant surprises down the road. No need to worry about seeing debits every day on your credit card sales, or trying to figure out mystifying fees and hidden costs.
The notion that small business loan debt is a bad thing is a long-held myth that is fortunately fading away. The truth? Smart debt financing can be an effective tool that provides the leverage you need to take big leaps in your business!
Are you ready to take your business to the next level? Take 60 seconds to check your eligibility for a Funding Circle term business loan today!