5 Benefits of a Small Business Loan

A small business loan comes with a lot of advantages – they can help you fund projects, purchase or lease equipment, payroll and get working capital when you don’t have enough freed up cash flow. To figure out if taking out a small business loan is the right move for your business, read below. 


What is a Small Business Loan?

A small business loan is working capital a business owner receives from a lender to invest in their business or to use for other business related expenses. A small business loan is paid back over an agreed amount of time, with regular payments. A business line of credit works similarly to credit cards, only pay when you use it.


5 Benefits of Small Business Loans

There are a lot benefits to taking out a small business loan. Here are a few to think about.


1. Speed Up Your Business’s Growth

If used correctly, a small business loan can help expedite your business's growth. The funding from a small business loan can allow you to put your plans into motion sooner rather than later. No need to wait until your business has enough profit to fund your business.


2. You Don’t Have to Sell Your Equity

A small business loan allows you to get an influx of cash without having to sell part of the company to investors. This lets you to keep full control of your company and keep all the profits as your business grows. Once you let an investor buy in, they will get a percentage of your profits as long as your business is open. A loan, on the other hand, is paid back and is only temporary. Once it is paid off, you will have no more obligation.


3. Overcome Cash Flow Hiccups

Any company can hit a cash flow issue. This is very common when a small business is experiencing fast, rapid growth. You may need to take on more workers and/or buy more equipment and inventory. A small business loan helps smooth out these ripples in the water.


4. Flexible Working Capital

If you receive funding from an outside investor, it is very likely that the investor will demand a say in how you use the money and could put restrictions on what projects can and cannot be used for. When you borrow directly from a lender, once you are approved and have the funds, there are no restrictions on how you can use the funding.


5. Less Costly Than Other Forms of Borrowing 

Most business loans have less interest credit cards, overdrafts, or personal loans. This is especially true if your company has been in operation for years and has a strong monthly revenue (revenue not profit). Most small business loans are unsecured meaning you won't have it against your name or require any collateral.

If you think your business can benefit from a small business loans, contact Click N Loans here or call (561) 525-5497.