There's something satisfying about watching your business grow from an idea into reality – especially when you see all of your efforts payoff again and again. Of course, not every moment of running a business feels blissful, far from it. There is a lot of blood, sweat, and tears that go into running your own business. That’s precisely why it’s important to use all of your available resources to keep your business growing.

One important tool you can use, that is often overlooked, is a business loan. I know what you’re thinking, “How is going into debt supposed to help my business!?” But bear with me, it will all make sense!

Should I Take Out a Business Loan?

The short answer is, maybe.  Review the common scenarios below and decide for yourself.  The right business loan can move your business forward and give you peace of mind at the same time. 

You Have to Spend Money to Make Money

We have all heard that saying before, because it’s true.  In order to continue to move your business forward sometimes you have to spend a little money, but you may not always have the cash on hand to take advantage of the opportunities as they arise. 

Example Situation #1:

You usually purchase your inventory quarterly for your small retail store, but your supplier is having an unexpected flash sale that could save you thousands of dollars on your most purchased items. Your cash flow won’t cover the cost to buy in the amounts you would normally purchase six weeks earlier than scheduled. 

What should you do?  Sure, you could let the sale pass you by and pay regular price at your regular scheduled intervals. Or if you had an operating line of credit it would allow you to take advantage of the sale and put yourself ahead of the game.

Change is Inevitable, Growth is Optional

The world around you is always going to be changing whether your business adapts to it or not is up to you. Sometimes as a business owner you are forced to make changes to your business operations based on outside forces. Occasionally you have a heads up, but usually not, either way you have to be able to react quickly.

Example Situation #2:

There has been increasing demand on your floral business from a fast growing part of town. In order to serve these customers efficiently it means you need to purchase a new delivery vehicle to meet that demand, but you hadn’t planned to buy a new delivery truck for two more years.

What should you do?  You could wait out the two years as planned, but you risk losing those potential customers to your competition. Or you could use an equipment loan to help you purchase a new delivery truck and capitalize on the growing population now.

Keeping Up With the Joneses

For every business, there is a minimum level of acceptable standards you need to meet in order to keep your customers happy.  These standards are different for each industry and each business, but sometime those standards means you need to spend money to maintain your own status quo.

Example Situation #3:

You have a new consulting firm and enjoy treating your new clients to dinner at a restaurant of their choice to celebrate your new partnership. But as your clientele continues to grow, so has the cost of maintaining these special dinners. Because your business is still new, your sales cycles don’t always match up with when you need funds to be available, causing you to overdraw your account.

What should you do?   You definitely don’t want to stop hosting this special relationship building opportunity. You could continue to expense the cost from your business checking account but you might start experiencing fees, which will only make matters worse. Or you could use a business credit card to continue to treat your valued clients to their special dinner without worrying about overdrawing your account.

Looking for a line of credit to fund your growth? Talk with our team today.

In Summary

The possibilities are almost endless for the number of situations in which a loan can help grow your business. Business loans don't have to be worth millions of dollars to be an effective growth tactic. Even a small $1,000 loan put towards the right purchases can give you high return on investment. It’s all about taking advantage of the opportunities as they arise and a business loan is a perfect resource to help you capitalize on them before it’s too late.

If you're thinking about getting a small business loan, contact First Alliance Credit Union and talk with one of our knowledgeable business advisors. They'll help you navigate through the world of business loans and commercial loan rates to get you the best solution for your business.