5 Reasons To Get a Small Business Loan

It’s a fact that about half of all new small businesses will fail within five years. When crunch time comes, many of those business owners look for ways to keep their company afloat. One of the available options is a small business loan. What are the top reasons for a business to consider this survival tactic?

USDA business loans

 1. The Company Is Running Out of Cash

 For whatever reason, when revenue isn’t consistent or just isn’t enough, cash flow (or the lack thereof) is often a problem. Expenses rarely go away. Crises are almost sure to crop up. Seasonal fluctuations take their toll. Without positive cash flow, it’s hard to stay in business.

 2. It’s Time for Business Growth

 Loans for small business growth are fairly common. When the chance comes to expand into new markets or increase a customer base, business owners don’t want to miss out because of finances. A loan could be just the thing to support growth.

 3. There Isn’t Enough To Cover Payroll

 Beyond the initial expense of hiring employees, sometimes making regular payroll is a struggle. This is particularly true when the company’s cash flow has already been negatively impacted in other ways.

 4. A Partner Wants Out

 A business owner may want to buy out another partner because one wants to retire or the two don’t get along well. It’s possible that one partner is ready to move in another direction. A small business loan is a way to get the necessary financing to make this happen.

 5. Business Expenses Are Too High

 It’s hard to predict all the ways it costs money to operate a business. There are taxes, rent, equipment, insurance, maintenance, marketing, and storage to consider. It costs money to have computer hardware and software installed and maintained. Business owners may need to pay to purchase raw materials. Before revenues come in, it may be necessary to obtain a loan to pay for these expenses.

 Eventually, most businesses, whether large or small, will face a crisis that demands quick action. In many of those cases, a small business loan could be the best solution. Access to cash during this time could mean the difference between surviving for another year or so and going under. If you’re a small business owner, fighting to survive those first crucial years or to stay afloat during the turbulence of a bad economy, research your loan options. A little bit of help could go a long way.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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