Tips For Getting a Business Loan #1
Considerations For Getting a Business Loan
Over the next three blog posts, we will examine several important aspects business owners should consider when applying for financing. Namely,
- Planning your use of extra capital
- Making sure your extra capital has a positive impact
- Know your numbers
The concepts are borrowed from small business author and Forbes contributor, Ty Kiisel. You can access the full article on Forbes.com by Ty Kiisel here. His book Getting a Business Loan: Financing Your Main Street Business is available on Amazon.com.
Part 1: Planning your use of extra capital
Evolocity’s financing is designed for short-term needs (up to 18 months). Many small business owners who contact us often do not have a plan set out to use the extra capital. Although extra cash flow is always an asset, short-term financing is not a long term solution and planning where that capital will be spent is essential.
Let’s take a look at a case study from one of our current clients, an auto shop in Ontario.
The auto shop was preparing for the Fall season. Customers had begun setting up appointments to get Winter tires installed and it noticed demand was higher than expected. The shop needed to purchase extra inventory, and they needed to purchase it fast or risk losing business to competitors in the area. Within a matter of days, the auto shop was able to secure to secure a small business loan and purchase the additional inventory needed. Without this financing, they would have been unable to fulfil their customers’ needs and potentially hurt future business by their inability to meet the demand.
Before getting a business loan, planning where extra financing will be spent is integral to business success. Our programs aim to create opportunities that would not otherwise exist for small businesses. Small businesses coming out of a relatively slow season often find it difficult to have the cash flow to profit from busier periods. The additional financing allowed the business to be prepared and profit during a peak period, satisfy past customers and meet the needs of new customers.
In next week's post, we will look at how small businesses can ensure additional capital has a positive impact.