It might be daunting to get a business loan, but these tips can help put your mind at ease.
Whether you’re venturing into your own business for the first time or you’ve been an entrepreneur for a while, you will eventually need to get a loan to further your business’ potential. Sure, your small enterprise could be climbing that ladder of success but you don’t need to stop there, this only means you have the opportunity to grow it even bigger.
It might be daunting to get a business loan for starting entrepreneurs— it’s a bit of a leap after all, but there’s nothing to be scared of. Businesses need additional capital as it gets big which is actually quite the good news, it means you’re on the proper path to success. You need to spend money to get more money and loans are there to help your business increase in revenue so you’ll get where you need to be.
The right time to get that loan
Of course, seeing your business thrive isn’t an automatic reason to get a loan, that decision still needs to be well-thought-out, planned, and executed at the right time. If you go for a business loan too early, it might jeopardize your finances and leave you unable to pay for the loan, too late might mean the opportunity for your business has already passed you by and again, you’re left risking your finances. The right time to get a loan is when you’ve already planned out where the money will go and how you’ll be allocating it.
But how will you know if it’s the right time? Give yourself and your business a little self-evaluation. Ask yourself these questions:
- What will you do with additional capital?
- How much would you need and how will you spend it?
- Do you really need the loan right now?
- Are you stable enough with your finances?
- How quickly will you see the return of investment (ROI)?
Answering at least those five questions will help you make your decision or at least shed some light on the situation.
Before you get a loan, you must be honest about where your business is financially. Lenders will be hesitant to give out a loan if a business has a history of late bill payments or questionable transactions. Getting a loan also means you have to be able to pay it back in a certain amount of time, if you aren’t doing well financially, you just might be digging a hole for yourself. A stable business in all aspects makes any entrepreneur trustworthy
Types of loans and where to get them
Once you’ve decided you’ll take a loan, it’s important to get to know the various types so you can determine which one fits your business needs. There are installment loans, term loans, lines of credit, short term alternative loans, and small business administration (SBA) loans. The success or failure of your business will highly depend on the type of loan you get so do your research!
We’re all quite fortunate that in this day and age, small business enterprises are given more financing options. This has certainly made being an entrepreneur a hundred times easier. There are banks such as BPI which have BPI Family Ka-Negosyo Loans which is catered to budding Pinoy entrepreneurs. Aside from banks, you can also try non-bank companies.
Deciding anything for your business is guaranteed to drive you crazy or confused every once in a while but don’t fret, you can read up articles online to guide you better. It’s a great thing online platforms like Entrego with its resources and experiences remain reliable for online sellers.
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