If you are a serial entrepreneur, you would be familiar with what a business loan is and how it works. A business loan is a type of loan granted by a lender or any financial institution that is specifically used for the needs of your business. This type of loan cannot be used for any purpose but only for the purpose of your business operations. It can be for raising capital to grow your business, expanding to other location, or even consolidating the various debts that a business may already have. A business loan can be a good partner or become your enemy as it can make your business succeed or break it.
But when is it the right time to acquire a business loan? Here are some of the tips to share to know if you need to start talking to your financial advisor for a loan.
- There is an opportunity for growth.
When you look at your statements, you will be able to identify if your performance is already at a maximum and you can still find room for growth. Growth is good but growing means spending. When you find your business in a situation where you can increase your inventory, expand to other location, or even increase manpower, a business loan is needed to support these.
- Increasing Capital
There are cases where a business requires to have a certain degree of capital before undertaking with another entity either as a business partner or supplier. Having an increased capital gives your business a good reputation of being stable. By raising your capital through a business loan can grant your business to meet the requirements for this engagement.
- Debt Consolidation
There are cases where debt consolidation is being required by the business for better tracking or even for lowering interest payment costs. A business loan can cover this debt consolidation strategy and put all debts under one loan. It helps the business keep track of the amortization due and amount.