05 Jul 6 Signs You Might Need a Business Loan

Businesses at various stages of their journey might find that they need a loan, whether it’s to gain working capital to get the business going, or to finance an expansion after years of solid growth. However, you might find it hard to decide whether to go for a business loan, or whether to wait for your revenue to grow organically or make purchases on your credit card instead. If you’re struggling to decide whether to take out a business loan, here are some sure-fire signs that a loan could do wonders for your business:

1. Your physical location is getting uncomfortably small

You might find that your office is now seriously overcrowded after hiring inexperienced staff to keep up with the demand from clients. Or perhaps your restaurant is struggling to seat all your customers on a busy Saturday night, meaning you’re missing out on potential customers. This is an exciting moment for business owners, as it’s a clear sign that your business is succeeding and growing in popularity.

Clearly, expansion is necessary to keep up with the demand from your customers, but for this, you might need assistance with financing. Work out whether you will be able to pay back the loan and make a profit from your new or larger location. A revenue forecast can help to work out how moving might impact your bottom line, and whether you can afford the loan after all.

2. You keep running out of stock

You may find that your business is so popular that demand keeps outweighing supply. If you find that you keep running out of supplies and losing sales opportunities, a loan will assist in increasing your supplies to meet the needs of your customers.

3. You need more staff

A solid team is necessary to provide a quality service to your customers, increase output and keep your business booming. When you’re first starting out, you may find yourself doing all the marketing, customer service and bookkeeping yourself. However, as demand continues to grow, you’ll eventually need to hire professionals in each of those areas. If you find that there’s simply too much work for your team to handle, but you also cannot see yourself being able to afford inexperienced staff, a business loan will provide the initial funding needed to hire and train staff.

4. You don’t have the right equipment

You may be working with equipment that you’ve had ever since the establishment of your business, which may now be outdated. If your output would increase with the aid of certain equipment, you might need equipment financing or a small business loan to keep up with your business needs. Ensure that the equipment you’re thinking of buying is truly a necessity and will increase your employees’ output.

5. You’re presented with an incredible business opportunity

Sometimes, the perfect business opportunity may come your way when you are not in a financially stable position to take it up. If you’ve been offered a chance to order inventory at a discount price, an opportunity to enter a new market, a chance to acquire a competitor’s business, or have found a retail space for purchase that is an absolute bargain, you may need a business loan to make that initial leap. Consider the return on investment to work out whether the debt will be worth it.

6. Your business needs a complete overhaul

You might find that your business has hit a wall, and is in dire need of rebranding, a new direction and a new team. If it looks like your business could benefit from a facelift or a change in direction, a business loan will get you going down the right path. However, make sure that a complete overhaul of your business will result in revenue and be worth the loan you have taken out to do so.

All the above are good signs that you could benefit from a business loan. Before leaping into it, decide whether the loan will improve your bottom line and if you can afford the repayments. If, however, you can’t quite determine whether a loan will help you hit your goals, take a second look at your situation before deciding. Speak to lending specialists about the best solution for you, and be prepared for the hard graft needed to reap all the benefits of the loan.