Jefanie Genilla
Considering a loan for your business can be met with all kinds of questions and opinion of what might happen if you take out a loan to start or expand your business. As many entrepreneurs have it, running a successful business is “80% execution and 20% idea.” So it’s possible that if something goes awry with the execution, your idea will be just like any other ideas – unprofitable and unknown to the world. But what can possibly go wrong with the execution? A lot, actually. Steph Russell (Vizually), Phil Derksen (Stripe Checkout), Jeremy Bodenhamer (ShipHawk) and many other start-up owners point out the following as the most common problems growing companies face:
- Need to create more products or offer more services to cater the growing client-base
- Need to purchase more fixed assets and equipment to sustain the increasing production
- Need to hire more talented team members
- Need to open a new office
- Need to allocate more budget for marketing
- Need to partner with more suppliers and pay them even when your customers haven’t paid yet
- Need to find a financial cushion during seasonal lows
- Need to have more petty cash for emergencies
Yes, all of these involve money. You may have started your business on a bootstrap and it has proven effective. However, it’s not wise to grow it without any form of financial backup such as a business loan or a crowd-sourced fund. Why?
- Immediate source of fund to take advantage of opportunities. Having a backup fund allows you to grab profitable activities that will come your way. For instance, you might need money to take part in local activities or send one of your team members for a project-specific training. These will help speed up your company’s growth in terms of marketing and product quality.
- Buffer during seasonal lows. Additional cash sources serve as your cushion during off-peak seasons. Seasonal and customer demand fluctuations may affect your sales and revenue. And you might need money to sustain your production, marketing and overhead costs.
- Financial cushion to offset expenses. With a business credit line, you’ll have access to quick cash you can use for various purposes. This is perfect for companies who’re into retail and product manufacturing wherein there’s a need to pay the suppliers first even when the goods aren’t sold yet or the customers haven’t paid the products in full.
- Quick cash solution for emergencies. Getting a business loan or any other type of financial backup can save you during emergencies such as equipment repair, workplace injuries or refund due to product defects.
Starting a business may be a challenging move, but growing it is equally crucial. A lot of money and effort will be involved so it’s wise to gather up all the resources you have. Having a financial backup in the form of a loan or crowd-sourced fund should be among your top priorities to ensure you can cover all your company’s expenses without disrupting your positive cash flow. That’s where LoansolutionsPH can help.
So don’t hesitate to let us know when you want us to match you up with reliable business loan providers. We will help facilitate the loan application process for your business to get the backup financing you need.
