One of the most challenging aspects of being a modern business owner is determining when it’s appropriate to start accruing debt by igniting a borrowing spree that can supercharge your company’s financial heft and help you expand into a new commercial era. Far too often, aspiring entrepreneurs and established business owners alike refuse to take fantastic funding opportunities because they’re scared of overextending themselves and seeing their commercial empire come crashing down, however.
There’s no use sitting around waiting for a miracle to happen. Until you get the capital your company needs to expand, you can’t do much of anything. Here are 5 reasons that now is the time for your small business to borrow.
Perhaps the most important reason that you should be seriously considering taking out a loan for your small business right now is that banks are on a lending spree, the likes of which we haven’t seen since before the great recession. Small business owners everywhere have been applying for loans because they’re wise enough to see that the U.S. economy is chugging forward and unlikely to slow down anytime soon, with big and small banks alike eager to give these companies the cash they seek.
Rather than trying to find funding when things get tight and few banks are willing to lend, the time to take on some additional capital is right now. A recent analysis from Forbes indicates that the unprecedented rate at which banks are approving small business loans won’t last forever, so try to enjoy this moment while the economy is still strong.
Besides the fact that banks are eager to give businesses the money they need to succeed, it’s also true that the general amount of loan applications being filled out is drastically increasing. This means that small business owners who refuse to apply for a loan could easily find themselves getting left behind in the market by a savvy competitor who decided that now was the right time to expand. Unless you want to slowly but surely lose the market share you’ve gained for yourself over countless years, considering joining the two-thirds of small business owners who are eager to expand their businesses this year.
You may think your company can endure competition without access to loans but taking on a line of credit may be the only thing standing between you and financial oblivion if you’re in a really cutthroat industry.
For many businesses, the digital age was welcomed with a hefty level of investment in IT equipment like computers, tablets, and smartphones for the entire office. Since then, however, digital technology has become much more advanced, and it’s likely long-past time you or your team members need fresh equipment that you may need to take a loan out to acquire. Those in specialized industries in particular may find it expensive to suddenly order new parts or gear when something unexpectedly breaks down, so taking out a loan when times are good to ensure your tools are in top shape can save you from future headaches.
Taking on too much business debt can be a surefire way to tank your company’s profitable potential, so it’s important to ensure you don’t get locked into a long-term agreement with steep interest rates that will come back to haunt you. When times are good, then, it’s wise to consider taking out a new loan from an investment bank that will help you refinance your existing loans and financial agreements, arriving at better interest rates and ensuring your company’s longevity despite its existing debt burden.
Business owners should never jump into refinancing their loans without doing plenty of homework, however, as this complex process can save you money but demands expertise and caution. Take some time to review the refinancing of business loans if you’ve yet to consider this path.
The Federal Reserve is going through some strange changes right now, with President Trump having nominated the controversial Herman Cain for a Federal Reserve seat. This unusual move shows that the future of the Fed is being defined by uncertainty right now, so given that times are good it’s not unfair to argue that this is the best period for borrowing we’re going to get for a few years. With strange and unexpected changes from Washington continuing to ripple across financial markets around the world, it’s safe to say that you want to take this opportunity while things are still calm and prosperous.
Taking out a business loan is never easy, but many entrepreneurs view it as the only way they can expand their business. Now’s the time for your small business to borrow, as the current market is rife with low interest rates and banks eager to lend their money.