Getting a business cash advance can be a simple,. painless and quick process but is it the right loan for you?
When reviewing applications for most cash flow loan products lenders will want to see items such as:
- Returning Customer Revenue
- Business Expenses
- Bank Transaction Frequency and Volume
- Consistency of Volume
- Seasonal Sales
So, how do you as a business owner know if a cash flow loan is the best solution for your business? Here are a few ways to know if it can be a helpful tool for your business.
- Would Funding help you to be able to say YES to a big job?
- Are you approaching a slow season?
- Would Funding help you take advantage of Inventory Discounts?
- Is there Equipment that you would be able to purchase sooner?
- Would it help you expand your business?
- Would Funding help you hire additional staff?
If the answer is YES to any or all of the above questions, well then a cash flow loan may be the perfect solution for your small business.
But the last thing you need to do is to take out a small business loan if your business is struggling to stay afloat. If you are already having trouble paying to keep the lights on and pay your employees a small business loan could cause your business to sink even faster because of a difficult yo pay, high-interest loan. So make sure that a small business loan is going to help your business and not hurt it.
We always tell our clients to look at the loan and make sure that the amount to be paid back is less then the amount that they will make from taking the loan. For example if you take a loan for $20k and have to pay back $30k will the use of the $20k end up generating enough revenue to pay normal expenses but also pay the loan back as well. If you can use the $20k to generate $60k in revenue then it is helpful. But if you only turn the $20k into $30k and break even then it probably isn’t worth it to take out a loan.
If you have any questions or would like to talk to one of our small business consultants about your situation feel free to contact us.
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