When should you seek small business financing?
Small business have all types of needs. Many business owners are reluctant to face the needs when it comes to seeking small business financing. There are various reasons why small businesses need money to include expanding product lines, short-term cash shortages, seasonal trends and more. While you may say you don’t need money, every business at some point in time will need capital. You need to assess your needs before you seek small business financing.
If your business experiences financial structural issues than you have cash flow issues. Cash flow issues can arise from a number of factors at a small business. Initially, maybe you used your credit cards to cover some expenses at your business and then you realize that the cost of credit cards are eating up your cash flow. You may have delayed filing taxes or may have unpaid taxes and all of the sudden you get hit with tax bill form the IRS. This in turn affect your cash flow. You may need extra money to get rid of these cash flow issues.
Your business is like a roller coaster. Some businesses have developed business models that create cash flow issues. This is not 100% your fault but this is the business model you created. You can only avoid cash flow trends by adding a new service or product to make up for the loss of income during those slow months. At the same time, when season is at its highest level for you not only does this mean more income but more expenses. When peak season comes in you may need more workers, marketing or inventory. This may require capital.
Another common reason that businesses obtain financing is to expand. Whether you’re opening a second location, adding new products, taking on new clients, or meeting the demands of the market you will need capital to grow your business. Small business financing will help you meet those growing demands that will grow your business.
These are some of the most common reasons that you need to consider when seeking small business financing.
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By Gil Zapata
Miami, FL October 20, 2017