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Starting up and running a small business is not something that can be decided on a limb. It takes time to properly draft an effective and practical plan that covers many of the fundamentals such as start-up costs, proposals, and financial exit strategies. However once that is accomplished, the benefits completely outweigh the disadvantages of taking that extra time. The beauty of having a plan is that it can change at any point in time. This is especially important for owners because things change at different points in time particularly where business financing is concerned. One question that comes up very often with small business finance is that of when to start getting a little help from the bank. Here is some general advice on when to consider a loan.


- You Are Increasing


You opened with your product or your service and now you need to buy equipment in order to cope with the demand. You started off and your customer base has grown to the point where you are looking at expanding your building. When you are taking out a loan to help pave the way for greater opportunities, you are making the right decision. Not just because you’re setting yourself up to make more money, but because you’re most likely going to be able to pay it back. This requires a bit of forecasting, but it is certainly more than possible to put together a reasonable strategy.


- Relocating


You’ve outgrown your old building, the income and customers are still steady but its cheaper to just move to a new building, you want to add an extra store. Whatever the reason for changing buildings, the key is that it is because you are growing. If you need a loan to put a down payment down on the new building or something to that effect, it is a good idea for you to at least begin to consider small business loans.


- Upfront Costs Are Required


This does not mean upfront costs in the sense of monthly rent or daily operations- you should never take out a loan for those reasons. However if you are looking at serious renovations or at upgrading your current equipment there are often upfront costs that you may not be able to afford all at once. As long as you are careful with your accounting and you have some idea of what your finances are going to be looking like for the duration of the loan, consult with your financial advisers but don’t hesitate to get a loan if the opportunity is there and the reasoning is sound.


Taking out a loan is a decision that is never taken lightly when it is just individuals involved, but when you are considering small business loans there are good and bad reasons for going through with it. If you are planning to use the money to cover bills and the like, there are more serious problems that need to be addressed. However if you are looking for ways to manage small business finance through loans, some good reasons are if your company is increasing, you are relocating, or if there are upfront costs that will need to be covered. The key is to make sure that you take the money because things are going well. That way you can rest assured that the money will be paid back to the bank.


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