Has your business plateaued? Find out how you can finance your way back to growth.
With the market centering on innovation and entrepreneurship, it can be easy to be lulled into a false sense of security that continued business growth is inevitable. However, businesses of all sizes can go through stages where profits level out, and you may need financing to kick your business back into gear. This is the guide to read if your business is in that stagnant stage.
OnDeck Small Business Loans
Among the largest online business lenders offering term loans and lines of credit at competitive fixed rates.
- Minimum Amount: $5,000
- Maximum Amount: $500,000
- Loan Term: 3 to 36 months
- Simple online application process with fast decisions
- Dedicated loan specialists and loyalty benefits
- Must have been in business for at least one year with annual revenue of $100,000+
- Must have a personal credit score of 500+
In this guide borrowing guide for stagnant businesses...
When is a business considered stagnant?
This is essentially when business growth plateaus. This may be due to an ongoing reduction in profit, to revenue slipping at a time of year when it should be increasing, or it becoming necessary to cut back in areas, such as marketing, which the business has not had a problem covering in the past.
Common expenses stagnant businesses may need financing for
Stagnant businesses can be in any industry and can be of any size, making their funding needs varied:
- Marketing. Due to decreased or plateaued profits, you may have cut back on your marketing budget. This is not the time to be cutting back, but it’s sometimes a necessity. You may be looking for funding to be able to pay for this and generate new revenue for the business.
- Human resources. There are several reasons a business may become stagnant, but this position may lead to failings in human resources, which impact the customer. By investing in your staff for customer service or product development, or hiring additional staff to assist with growth, you may be able to help your business expand.
- Product or service redesign. Some businesses have a successful product or service at first, but they fall into stagnation due to lack of development or innovation. By seeking finance to expand your product line, re-innovate it or even just do market research, you can assist your business.
- Hire outside help. It can be difficult to diagnose business issues if you’re entrenched in the business’s practices, which can make hiring outside expertise a good investment. You may opt for organizational experts, designers for marketing or website help or a PR agency that can drum up some interest in your business.
What are the best types of financing for these needs?
|Loan type||Loan amount||How it works||What to consider|
|Line of credit||$10,000–$1,000,000||Repay only what you use of the credit line, plus fees and interest|
|Term loan||$5,000–$5,000,000||Make regular repayments over a set term, calculated at a fixed or variable rate|
|Invoice financing or factoring||Up to 80% of the invoice amount||Pay fees to get an immediate advance on your outstanding invoices|
Useful guides for stagnant businesses
Compare lenders who could help you put your business back into growth phase
How to compare your business loan options
If you’re unsure what business loan you should opt for, here’s how you can compare the options you have:
- Loan amount. You will have a general idea of how much your business needs to borrow, so make sure the lender offers this. Business lenders usually have minimum and maximum amounts available, and if you’re taking out a secured loan, it will depend on how much your security is worth.
- Interest rates. Lenders will charge a fixed or variable rate, or a factor rate, which is calculated differently. Check what type of interest rate will be charged and how high it is to get an idea of how competitive the loan is. Remember, the comparison rate will show you a representation of the interest rate plus fees.
- Fees. You can be charged a whole range of fees with business loans. These can include upfront fees such as establishment and application fees, or ongoing fees such as monthly or annual fees. Late fees and default fees will also apply.
- Turnaround time. How soon do you need the funds? Alternative online lenders can get your funds disbursed in as little as 24–48 hours after approval, but more traditional lenders may take longer. Be sure to check that the turnaround time meets your needs before you apply.
- Flexibility. As your business is stagnant, you may need a more flexible loan than what is offered. For instance, can you borrow more funds easily if you need to? Are you able to repay the loan early without penalty, or make additional repayments? Verify the flexibility of the loan before you apply.
What’s the eligibility criteria for different business lenders?
|Lender||Requirements||Read the full review|
|National Business Capital||Your company must have been in business for at least 6 months and have an annual revenue of at least $180,000.||More|
|SmartBiz SBA Loans||Personal credit score of 650+; US citizen or permanent resident; Business must be 2+ years old; Annual revenue of $50,000+; No outstanding tax liens; No bankruptcies or foreclosures in past 3 years.||More|
|LendingClub Business Loans||2+ years in business; $75,000+ in yearly sales; No bankruptcies or tax liens; At least 20% ownership of your business; Fair or better personal credit||More|
|Able Lending||Business must be in operation for at least one year, bring in at least $50,000 in annual revenue, must have a personal credit score of 600 or higher, no personal bankruptcy in the past 12 months.||More|
|Kabbage||Must have been in business for at least 1 year. Revenue minimum is $50,000 annually or $4,200 per month over the last 3 months.||More|
|OnDeck||Must have been in business for at least one year with annual revenue of $100K+. Must have a personal credit score of 500+.||More|