A large number of small businesses have many concerns to keep track of, and owners may run into difficulties just trying to keep up with all of them. And while this problem is in no way unique to any particular company, it is nonetheless a major issue. Fortunately, it may be possible to find some relief through small business financing of different types.
Small business lending has been in the news a lot lately because of the restrictive ways in which banks have approached it in the last year or more, meaning that many companies may not be able to tap the kind of financing they need to grow and succeed. However, that shouldn’t be a reason for owners to get discouraged, and indeed, it should instead lead to continued efforts to obtain such a loan, according to a report from the Raleigh News and Observer. The trick is often in finding the right kind of financing from the right kind of lender.
One of the most important things that small business owners can do when they apply for a loan is to keep their expectations reasonable, and to know exactly how much they need to accomplish the goals they’re presenting to the lenders, the report said. For instance, if a company thinks it will need $300,000 to undergo expansion efforts, asking for $500,000 is likely to be a major turn-off for lenders. The more evidence companies can provide to show that they need the exact amount of money they’re asking for, the greater their chances of being approved will be. Banks like to see specificity, especially when they’re giving out large sums of money, and the more a small business can provide, the better the lenders will feel about extending that credit to them.
Of course, not every small business loan is created equal, and one type of financing that would work for one type of business venture may not be right for another, the report said. For this reason, companies will also need to do more to make sure that the kind of financing they’re applying for will work for them and their current needs in particular.
Other routes might work too
Meanwhile, companies hoping to shore up their finances even when they can’t obtain a small business loan may have a number of options to do so, the report said. That could include revamping the way they charge money for their services, or other options, as a means of potentially increasing their cash flow and reducing their need to rely on this kind of financing
“Quite often, there are lots of negotiable terms that people can look at to help ease them through time,” David Grant, president of the Raleigh and Durham, North Carolina, chapter of the small business assistance nonprofit SCORE, told the newspaper. “You can work both ends of the spectrum, as far as trying to have your customers pay you in a shorter space of time or elongating the time it takes to pay your suppliers.”
Owners may also be able to find some amount of success by reducing the various costs they face in the course of running their companies. That can often include the rather expensive kinds of small business insurance coverage that costs companies thousands of dollars or more every year. By finding more affordable coverage for things like general liability insurance, among others, entrepreneurs may be able to boost their financial flexibility going forward so that their companies have a better chance to survive and thrive as they attempt to grow.