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Is it the right time for a business loan?

When is a small business loan the best solution for your business?

As a small business owner, you are constantly bombarded with decisions and it can sometimes be difficult to separate the proverbial wheat from the chaff. One of the major decisions you need to make is whether it is the right time to take on a small business loan. Many of us are cautious about extending our business finances to take on new debt: yet sometimes a loan is the best way - if not the only way - to fund business growth.

So how can you judge whether now is the time to take that next step? Here are five good indicators for taking on a small business loan:

1. To secure new premises

Perhaps you have been operating from home or in a commercial premises that is now too small for you? Whilst you need to minimise costs there will come a point in your business where the limitations of your space are beginning to restrict your operation. If it’s time to move onwards and upwards then a small business loan could help you make that transition and start the next chapter of your business journey.

2. To buy new equipment

Depending on your type of business, it may make financial sense to buy equipment rather than leasing it. There may be tax advantages and you may be able to depreciate the cost of the equipment over the period of its economic life. You will need to do a cost-benefit analysis for your particular situation, but should you decide to purchase then a small business loan could be the way of doing this.

3. To purchase stock

We all know the old saying about needing to “speculate before you accumulate”. But particularly for retail businesses there is the dilemma that you can’t sell stock to willing purchasers unless you have it available: and in these times when customers expect their needs to be met instantly you are likely to lose business if you can’t supply. This is even more relevant to those small businesses that are seasonal in nature, when they may need to purchase a large amount of stock to gear up for that time. A small business loan could bridge this gap.

4. To fund business growth

When you are ready to grow your business and take it to the next level, you are likely to need some additional funding to help you. Perhaps you are planning to take on additional staff, increase sales or expand your range of products or services. A small business loan might be just what you need to finance this next step and enable you to take advantage of new opportunities and see your business grow.

5. To increase working capital

As well as the above specific crunch points, small businesses need money for everyday expenditure! Many small business owners feel a sense of embarrassment or failure at considering a small business loan for this reason, but it is perfectly valid. Sometimes a business needs the boost of a small business loan to meet its daily operational needs until a regular flow of income is established. The loan can then be repaid and the business is afloat.

Whatever your reasons for needing a small business loan, why not talk to us at Fair Business Loans? We have a passion to see small business thrive and grow, and a proven track record in helping them do this. We can help you through your decision-making process and provide small business loans on an open and transparent basis. To find out more, get in touch with us today!

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