How Small Business Loans Can Boost Your Bottom Line

loan calculatorIf you’re a small business owner, you know how much it takes to keep your business running successfully. And with all the expenses that need to be covered on a day-to-day basis, it can sometimes be difficult to keep your profits where you want them to be. Small business loans and lines of credit can help safeguard your bottom line when used to cover short-term expenses such as payroll, inventory, emergency expenses, and seasonal lulls. Whether you’re looking into small business loans or a business line of credit, learn how these funds can help you keep your business running smoothly.

Keep your business growing with a business line of credit or term loan

Running a business is rarely an inexpensive undertaking. Many small business owners have the vision, but securing the capital to make it happen can be tough. That’s where small business loans or a business line of credit come in. A line of credit is a short term borrowing option that revolves upon repayment in the draw period and will help you cover both projected and unexpected everyday expenses, such as inventory. A term loan, on the other hand, is more beneficial for long-term expenses, such as equipment and real estate. 

Invest in expensive equipment with a business term loan. If your business is dependent on expensive equipment, like commercial refrigerators, cranes, forklifts, assembly lines, or technical equipment, you might want to consider applying for a business equipment loan. For example, a forklift alone can cost anywhere from $20,000-$30,000, not including the thousands of dollars needed for accessories and replacement parts. 

Deal with expected and unexpected daily expenses with a business line of credit. A line of credit can be used to cover everyday working capital expenses, and help you make essential repairs. It can also handle shortages in cash-flow while you wait for your accounts receivable to come in. Finally, if your equipment does break down, having access to a business line of credit will make it possible to order replacement parts, finance the repairs and get your business moving again. It can also be helpful when purchasing additional accessories for your equipment.

Keep your business going with business lines of credit to manage seasonality

Many businesses experience yearly dips in income and profit. For instance, florists may experience a significant drop in business during the fall and winter and a growth in the spring and summer. Likewise, some retailers may experience a boom before and during the holiday season, but a decrease in the summer. These seasonal shifts in cash flow can cause major problems for some businesses. They may have to make personnel adjustments, shorten hours, and cut back on basic operating costs. Or conversely, hire staff and increase hours and operating costs to prepare before the revenue comes in. Business lines of credit can help you get through these seasonal lulls each year.

Stock or replenish inventory. When a business, such as a retailer, is gearing up for the holiday spending frenzy, they may not have enough cash on hand to restock their inventory to its full potential. Without enough products and services during a period of high demand, a retailer can take a serious hit in terms of sales. Business lines of credit can be used as cash flow loans to help businesses cover their restocking costs in the short term, so they don’t miss out on the profits. 

Pay off-season wages and salaries. When a business is experiencing a dip in profit and/or cash flow, it may be even more important to retain staff, especially if its personnel are skilled, in-demand workers. Business lines of credit can help you afford maintaining a full staff and essential employees during periods of low growth and even loss due to seasonality. 

Expand your business with working capital loans

Sometimes you have to spend money to make money. That’s why many businesses choose to expand. But expanding your business can be both an exciting and stressful enterprise. Often, an expansion means buying or leasing business real estate and/or hiring more employees, which may require more liquidity than you have on hand. That’s where a blend of business loans and lines of credit can help provide for your short-term financing needs and bolster your success and growth down the road. Whether you’re looking to open new offices or locations, offer new products and services, or bring on more personnel, small business loans and lines of credit can make it possible for your business to reach its full potential.

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