You may not like going into debt to boost your business. But sometimes, it’s what you might need to do to keep your business operational. Bearing in mind that 50% of businesses don’t survive the first five years, you should do everything possible to avoid such a fate.
Certain situations call for borrowing money. And if you find yourself dealing with these situations, then consider Small Business Administration (SBA) loans. These loans are partially guaranteed by the government so that lenders in Ogden and other locations can loan small businesses money with minimal risks.
Here are some business needs that may require financing:
1. You need to acquire real estate for your business
Do you have the space to run your business? If not, you need to consider getting an SBA loan. This loan will help you lease, build, or buy the commercial estate that you need to continue operating your business successfully.
2. You need business equipment
Can you run your business without the proper equipment? Probably not. It’s a good thing that SBA loans exist to help you acquire business equipment. If your equipment is no longer functional and needs to be replaced or if you need new equipment altogether, getting a loan makes sense. Equipment is part of your fixed business assets, which you can use for a long time to generate revenue. Getting a loan to acquire it is worth considering.
3. You are dealing with a natural disaster
When a natural disaster strikes your business, there is nothing you can do except survive. When your business has been hit by a disaster, you may not be in a position to recover financially due to the excessive damage that may be caused. To get your business up and running again, you may need to borrow money.
That is where SBA loans come in. It’s possible to get a disaster loan that will tide you over until your business starts generating revenues again.
4. You need capital to expand
Perhaps you already have the real estate and the equipment to run your business, but you have ideas to expand and no money. What should you do? Should you give up your dreams and be contented with the current size of your business? Of course not.
There is a loan program that SBA offers that you can use to start or expand your business. It’s known as the 7(a) Loan Guarantee Program. You can get as much as $5 million. That’s enough to get you started in fulfilling your dreams of business expansion.
5. You have poor cash flow
Studies show that poor cash flow is one of the biggest causes of business failure in the U.S. Without liquidity, it may not be possible to run your business properly. Suppliers need to be paid and yet your customers may not be paying as fast as you need them to. And yet your business needs proper cash flow to survive.
Instead of letting your business fail, you could take advantage of a variety of SBA loan programs (depending on your business type) and keep the business running smoothly.