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Top 3 Reasons Why You Need a Small Business Loan

August 19, 2016  - Small Business Loans
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When you are busy building a small to medium sized business (SMB), it's sometimes hard to see the forest through the trees. Your life can become a 24/7 never-ending cycle of work, billing, marketing, strategizing, and more work. Every now and then an idea or opportunity comes along and you need to take a look at your bank account and make a decision: Can or should I invest in this? How can I make it work? Should I just wait? Or can I take out a small business loan to accelerate my business?

You don't want to miss an opportunity that could offer growth, broaden your market, or allow you to work more efficiently – but many businesses do just that. Either they are not financially able to make the investment, or don't think about business loans for the type of business investment they want to make. A large portion of small businesses take the bootstrapping approach of using their personal finances or just buckling down and scaling back in some areas until they've saved enough to make the investment – but that could not only hinder growth but set you behind the competition. With only approximately one in ten small businesses succeeding after five years, assuring growth, operational efficiencies and proper capitalization is critical.

As the saying goes, "you need to strike while the iron is hot." The same goes with business expenses: you need to act quickly to take advantage of an opportunity, build growth, or improve operational costs. Here are 3 top business scenarios where a company should consider a small business loan to accelerate their growth:

Driving operational and financial efficiencies

Improving your financial structure and operational efficiencies strengthens the foundation of your business. This pursuit also helps you to leverage these foundational improvements in other areas of your organization. A small business loan can release capital for use in one area and yet give you short term, or bridge financing, to keep the business running at the right pace. These small business loans can be for anything from purchasing inventory to bridging payroll or receivables and even paying taxes. Proper capitalization and access to cash reserves as a buffer are essential for a business to be successful, so building a relationship with a lender that can help bridge these areas of your business will help unlock unforeseen value.

Mobilizing project resources

There are times you might find yourself in a position where an investment in manufacturing, equipment, or hiring new or temporary employees can make a big difference. This could be for gaining efficiencies or being in a better position to take on – or bid on – new business. A small business loan can be used for investments in your workplace manufacturing automation, avoiding costly equipment rental, or a number of other investments such as vehicles or industry-related equipment or talent that can allow you to mobilize project resources while making smart financing decisions to fund the investment and ensure that cash flow projections are met.

Investing in marketing and business improvements

There are smaller investments that are still costly but can help drive growth in your company that should not be overlooked. Marketing activities, improvements in signage, remodeling of business space, or upgrading computers or workplace software may not be top of mind for a small business loan. These are things that may be routinely postponed for budget reasons. And typically, these items can take a backseat to other more pressing issues. These types of investments, however, can have a significant positive impact on not just the business, but you and your employees. Being able to produce superior marketing campaigns, work more efficiently utilizing better IT capital purchases, or investing in the infrastructure that will support a larger organization will help with overall business growth.

Once you decide your company would benefit from a small business loan, you need to find the right partner who can provide fast, flexible financing options that fit well with your overall business goals. If you are sitting back thinking: maybe I should look into a short term loan to do X, Y, or Z for my business – we can help.


Prepare yourself and your business by taking a look at our blog: 4 Tips to Get a Small Business Loan Approval to start you on your way. And if you need just one more reason to consider a small business loan, think of this: obtaining a short term loan may be the only thing standing in the way of making your dream a reality.

Contact us today to learn how Ascentium Capital can help set your business up for success. 

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