9 situations when business financing makes sense | finder.com
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9 situations when business financing makes sense

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How to know when it’s the right time to use a loan and invest in your company.

Running a profitable business involves routinely returning to square one to reevaluate its trajectory. Doing so can give you insight on your next steps to further success — and whether you’ll need more working capital to put those plans for growth in motion.

Here are nine smart ways that business financing can grow or improve your business venture:

  1. Buy more inventory.

    Customers won’t be thrilled if your supply of products can’t keep up with their demand. A backstock of inventory can ensure that your loyal consumers won’t end up shopping elsewhere.

  2. Expand your business.

    As your business needs increase, you’ll likely grow out of your first space. Business financing can help you move on up to a bigger office, expand your warehouse for growing inventory or make room for employees in other locations — all good problems to have.

  3. Upgrade your equipment.

    To keep up with increasing business, equipment upgrades are necessary for more efficient output. When you’re shopping for new equipment, weigh whether it’s a must for your business plan or just a want.

  4. Build positive business credit.

    If you started your business without the help of a loan, you’ll want to build a business credit history so that if you do need more financing down the road, you’ll be eligible for the lowest rates and most flexible terms.

  5. Cover unexpected expenses.

    Be it broken machines, much-needed renovations or a lull in business — emergency expenses can pop up. A business loan can bail you out of a sticky situation while keeping the wheels in motion to prevent profit loss.

  6. Qualify for a lower interest rate.

    If you’ve already taken out a business loan, you may not have gotten the interest rates you were hoping for the first time around. But responsible payments and an established business credit score can put you in a better position for more competitive rates. Even a small drop in interest could save you thousands in the long run.

  7. Jump at a business opportunity.

    The unexpected can be positive. Like the opportunity to land a commercial account that requires increased output or an unbeatable deal on a product when bought in bulk. A business loan can float your business with extra cash to take advantage of a productive opportunity.

    But calculate the risks of taking on extra business or product so that you’re better positioned to end up in the green.

  8. Hire and retain talent.

    Who you hire is a direct investment in your business, and you’ll want to give your employees the resources they need to grow alongside you.

    Employee trainings and competitive pay can prevent employee turnover. And more hands can prevent your current employees from spreading themselves too thin.

  9. Advertise and promote yourself.

    Depending on the type of business you have, word-of-mouth may not be enough to reach your potential customer base. Advertising and marketing is a smart investment that can help you pick up new business and a diverse clientele.

Compare top business loans

Rates last updated November 21st, 2018
Unfortunately, none of the business loan providers currently offer loans for these criteria.
Name Product Product Description Min Loan Amount Max. Loan Amount Requirements
LoanBuilder, A PayPal Service Business Loans
Customizable loans with no origination fee for business owners in a hurry.
$5,000
$500,000
Annual business revenue of at least $42,000, at least 9 months in business, personal credit score of 550+.
Credibly Business Loans
Funding to cover business expenses with daily or weekly repayments.
$5,000
$250,000
500+ personal credit score, 6+ months in business, $15,000+ average monthly deposits
National Funding Small Business Loans
Working capital loans and equipment financing, some high-risk industries may be eligible.
$5,000
$500,000
Be in business at least one year and make at least $100,000 in annual sales. Other loan types have additional requirements.
Lendio Business Loan Marketplace
Submit one simple application to potentially get offers from a network of over 75 legit business lenders.
$500
$5,000,000
Must operate a business in the US or Canada, have a business bank account and have a personal credit score of 560+.
LendingClub Business Loans
With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.
$5,000
$300,000
12+ months in business, $50,000+ in annual sales, no bankruptcies or tax liens, at least 20% ownership of the business, fair personal credit score or better
OnDeck Small Business Loans
A leading online business lender offering flexible financing at competitive fixed rates.
$5,000
$500,000
500+ personal credit score, 1+ years in business, $100,000+ annual revenue
Fora Financial Business Loans
No minimum credit score requirement and early repayment discounts for qualifying borrowers.
$5,000
$500,000
Business age 6+ months. Monthly revenue $12,000+. No open bankruptcies.
LendingTree Business Loans
Multiple business financing options in one place including: small business loans, lines of credit, SBA loans, equipment financing and more.
Varies by lender and type of financing
Varies by lender and type of financing
Varies by lender, but you many require good personal credit, a minimum business age and minimum annual revenue.

Compare up to 4 providers

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