How you finance the expansion of your business is important. Borrowing and understanding the consequences of borrowing for your financing is extremely important. If you are going to borrow the money to finance the expansion of your business, you need to make sure that you are not going to get yourself into a cash crunch situation. This is where you are going to have a lot of money coming in from new business completed and invoiced but not have enough current cash flow. When you borrow you will be financing new equipment, locations, signage, or perhaps a new work truck on a credit line, lease or loan payments. The initial payments are going to be due before you get your increased income from the expansion in. This can be a major critical problem and we do not want this to happen to you.
When you finance your business location or expansion, you need to make sure that if you will be borrowing and will have to pay that money back with interest charged on the various loan programs. This is going to cut into your cash flow. You could also charge the equipment on a credit card, which is about the same rate as an equipment business lease. Maybe even a little less believe it or not.
The easiest way to get financing for expanding your business is to go down to your bank and get a loan. But you are not going to be able to get a loan if you have been hiding all the cash from your business, not making any deposits. That is something to think about. So many small entrepreneurs start out on the wrong foot hiding or skimming cash, then when they need to expand they have no proof of income or sales and cannot get qualified for a loan.
Now you may be in a position with your business where you can just pay outright for an additional units, equipment, locations or outlets, if this is the case hats off to you're my friend you are truly in a good position. This is a great position to be in but remember that if you put the money out in cash, you no longer have use of that money for other business needs. But it is a nice position to be in to be able to pay up front as your business grows. Remember though, some business investment assets are easily financed while for the purchase of others it is often easier to pay cash or just write a check.
Pkay then you are all set and have determined that the business needs to expand to take advantage of increased sales opportunity in your market place. So, Where to Get Financing? When financing your business expansion, there are many important factors that can make your task a total nightmare (the loan from hell) or extremely easy and a relative piece of cake. The smartest way to finance your business isn't the easiest. The easy way is to pay for it your self out of savings or use a credit card. Unfortunately if you take money out of savings that was there in case of emergency or for a down payment for your house or something equally important, this may put you in jeopardy later if you need that money.
The SBA would be a nice way to go but it takes a long time for them to approve a loan. If you own a home they want you to put it in the loan as collateral in case you don't pay your loan back. By the time they give you the money your investment opportunity is often lost. That big account you got that would nearly pay for all the new equipment has to be started ASAP. If you finance through the SBA 7(A) program, they will not let the loan term extend beyond the term of your franchise, if you are a franchised outlet. You may also be required to pay that loan off before you get any others
In summary, when doing business with the SBA you will: Pay more as a down payment; Spend more time in the approval phase; Need more collateral; Face shorter repayment terms; Be very aggravated by the whole process.
Approval of Credit for simple business bank loan takes time. If you are trying to get credit from your bank or from an SBA loan or something like that, it takes time. Be prepared to wait anywhere from several days to several weeks for approval. You need to factor this in if you are thinking you want to have a new location or more equipment for your current operations. If you need to expand look at your bottom line, can you afford it? Will your cash flow be able to handle the new debt if you are delayed for any reason from local building regulations, an inopportune lawsuit, competitive changes in the market, downward sector rotation in your industry. Think long and hard about these issues and if you decide to go for it, check all your options, interest rates, pay back periods and do what is best in the short term and the long run.
"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.worldthinktank.net/wttbbs
Wood Dale Chicago prom limo .. Lockport Chicago limo O’HareIs your business growing as fast and effectively as it... Read More
Microsoft Great Plains, former Great Plains Dynamics is excellent fit... Read More
Business plan financial projections seem daunting because they are so... Read More
Writing a business plan is an essential part of the... Read More
How are you feeling today? Good, not so good, great?... Read More
"Begin with the end in mind," says Stephen Covey in... Read More
Obviously, there will never be an actual water shortage since... Read More
American Eagle Outfitters and Wet Seal Stores have issued statements... Read More
The University of Exeter in the United Kingdom recently published... Read More
What gets measured gets done.How do you keep your business... Read More
Storytelling and writing a business plan actually go hand in... Read More
The boom of the dot-com era in 1999 brought the... Read More
We all agree Strategic Planning is a critical part of... Read More
So what makes a vision successful? Everyday companies try to... Read More
It doesn't take a Terrorist Act, Tsunami or Earthquake to... Read More
In most business plans, no matter how striking the idea,... Read More
Making money doesn't make your reputation... your reputation makes you... Read More
No matter what business you plan to start in your... Read More
Canada's lean leaders need to look beyond the horizon and... Read More
A well known, national chain of restaurants discovered that certain... Read More
A focus group is a group of employees or current... Read More
One of the quintessential parts to any business is your... Read More
To Grow (Catapult) Your Business That's Why.When it's in your... Read More
We have been spending many hours surveying the market for... Read More
If you own a pressure washing business one of the... Read More
Antigo wedding limo ..Cassy was an employee of a nonprofit who had been... Read More
In this small article we'll concentrate on farmers associations and... Read More
I. INTRODUCTIONThe term resilience, which is of frequent use in... Read More
I recently took an organizational behavior class where my professor... Read More
Ask a small business owner about their strategic plan and... Read More
Can you imagine going on a road trip without knowing... Read More
The decision to sell, or not to sell your business... Read More
So you've decided to write your own business plan because... Read More
A business plan precisely defines your business, identifies your goals,... Read More
The foundation of any business transaction is the promise of... Read More
The new check cashing instant clearing will take some time... Read More
One of the most important initiatives in the domain of... Read More
Here's a really simple way to make sure your plans... Read More
Diversify - to make diverse, give variety, to balance, to... Read More
One of the quintessential parts to any business is your... Read More
Do you work in or own a business that's affected... Read More
When someone mentions business planning we have been conditioned to... Read More
Business seems to drop, slow or even stop during the... Read More
Strategic planning and consulting is the strategy roadmap to manage... Read More
A piano tuner recently moved to Buffalo, NY, and would... Read More
As a franchisor it is imperative that you seek, find... Read More
By cranking up others development to meet your business needs,... Read More
A strategic alliance is when two or more businesses join... Read More
Experts estimate that 90 percent of Australian businesses are overspending... Read More
Growing your own small business can be one of the... Read More
Strategic Planning |