When you own a business your goal is to make money. It may seem that borrowing money is counterintuitive to this, but in actuality, there are certain situations in which it can be necessary to borrow money to make money. These three situations top that list.
1. Start Up
If you wait until you have the cash on hand to start your new business, you likely will never start. That is unless you are independently wealthy, have a rich relative willing to gift the funds, or you can find investors with deep pockets. There are those that can finance a startup on their own, but the vast majority of the world will need to borrow funds, to some extent, in order to fulfill their entrepreneurial dreams. SBA loans offer attractive interest rates, while other types of funding, including marketplace lending on platforms such as Biz2Credit, offer speed and reasonable rates.
Often times spending is necessary for a business to grow. Whether it is to purchase supplies and inventory to keep up with demand, to add on to an existing building, purchase a new one to handle a growing customer base, or to simply add more locations, growth is necessary for profit. Money is necessary for growth. It is great if a business can float growth on its own funds, but to keep cash flowing it is sometimes necessary to borrow the money. If growth is truly warranted, the profits made will far exceed the debt incurred in the long term.
3. Equipment Repair/Replacement
If you have a major piece of equipment that needs to be repaired or replaced, you would obviously rather pay cash. What if you do not have the cash? If it can wait, go for it. If your business essentially stops without this piece of equipment, it is time to consider commercial equipment financing.
In any case, a cost benefit analysis is necessary to determine whether financing is the best course of action. When the decision is made in favor of borrowing, Biz2Credit is here to help. Our network of over 1,300 lenders includes banks, credit unions, and more non-traditional lenders all with various financing products from real estate financing options to small business startup loans. We can help you find the right one to fit your needs. Visit Biz2Credit.com for more information.