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Best Proven Uses of a Business Loan


Running your own business is rewarding but not without its challenges. Upgrading tech equipment, cover when key personnel have medical crises or getting the staff and supplies to fulfill new orders require cash up front.

At this point, most businesses acquire loans. Even Apple has taken on $148 billion in corporate debt since May 2013. America’s corporate borrowers have $900 billion in cash but $6 trillion of debt, putting big business cash-to-debt ratio at 12%. Most small businesses wouldn’t risk that kind of cash to debt ratio, but they must keep in mind their eventual valuation when making financial decisions.

There are a myriad of proven uses for a low-cost business loan, some of which many business owners never even considered. Here is a list of the best proven uses of a business loan that can help your company sail into the future successfully.

  1. Relocation needs

Fast growth can be both a blessing and a curse. Increased demand may mean a move to a larger facility or storefront to serve your customers. Few businesses expand without business loans. A business loan can definitely cover these expenses, so that you can extend your company’s services as needed to increase profits.

  1. Updating your operating systems

As technology continues to improve and change at a rapid pace, so too does your company also need to keep itself on the cutting edge of the latest operating needs. Otherwise, your business won’t stay competitive with the competition that is enlisting these updates, and your earnings will ultimately suffer. It can be costly to constantly keep your operating systems up to date with what the market requires, and this is exactly where a business loan can help. So don’t neglect to purchase the latest operating machinery or IT tools that your business needs to keep itself viable in the marketplace.

  1. Hiring more employees

In the early stages of running your own business, you most likely handled every task, from whether it was accounting, sales, marketing, or production. But in order to grow successfully and keep up with the demand, you inevitably have to dole out these duties to new employees. You also may need to hire on specialized experts in your field, or even pay for sales and marketing professionals who can ultimately increase your customer base even more as it continues to expand. A business loan will come in handy when you realize you have to increase your staff.

  1. Develop your Available Credit

If your business is still in its infancy, then it’s possible you haven’t yet achieved a long credit history yet. Getting a business loan is perfect, especially if it’s a short term loan, because it can build up your business credit history. If you can prove you can make payments on a smaller loan, it is easier for your business to get a larger business loan amount in the future. Baby steps are sometimes necessary to get to the more grand scale financing that can handle the major business funding your operation will most assuredly need further down the road.

  1. Increase your inventory

If your product or service output cannot currently keep up with the demand, that is a lot of lost profit! Don’t lose any more sales simply because you don’t have the funds to increase your inventory. A business loan will enable you to easily increase your inventory output, and satisfy your growing market. Your customer base deserves access to what your business is offering, without any delays, or even worse, a without a “cannot satisfy order” response!

  1. Rainy day funds

Unexpected business expenses are always a possibility. With Murphy’s Law in effect, what can go wrong will go wrong. If your business is barely making ends meet month-to-month, some unexpected expense, such as equipment failure, rewiring issues, or even computer virus malfunctions, can cut into your earnings. A business loan can be made available to handle these emergencies, and keep your company afloat and profitable.

A+ Rated First Financial Gets You Great Business Loan Rates, Longer Terms and Robust Security

First Financial is pleased to work with you and your company, and provide business loans that will maximize your ultimate profit earnings. We understand the trials and tribulations with running your own operation, and we can help you out almost immediately. Once your loan is approved, you reap the rewards that a First Financial loan offers, such as an easy and fast application process, helpful loan advisors available to assist you 24/7, and low credit rates. Apply today!

Your First Business Loan: 7 Tips on Getting the Best One

borrower getting cash advance


Congratulations on considering getting your first business loan!

 This step typically means you’ve been in business for a while, have sustained profits and are providing needed products or service to your community. You’ve beaten out 95% of other business owner wannabes!

Most likely, you’ve gotten here by taking careful, conservative steps. Continue your careful habits by researching the smartest ways to get your first business loan.

1. Understand Your Options

While you’ll certainly be grateful for receiving your first business loan, keep in mind that you’re providing valued business for a lender as well. Take the time to see how you can get the funds you need at the lowest rates and best terms.

Business financing comes in many forms: business loans, business credit cards, business line of credit and invoice factoring. Another instrument, the merchant advance is an early payment of the income you regularly receive through credit and debit cards. It’s typically a quick turnaround, paid back to the lender once those monthly funds come in. Understand the needs of your business and/or industry before you jump on the decision of getting a business loan.

2. Analyze Your Credit

A business’s credit rating dictate the interest rates of any loan you consider. Your business credit score and personal credit score both impact the lender’s decision. Personal credit scores indicate how well you handle money. Cash flow, expenses, and assets all figure in to how much a lender will approve and for what rate. The sources lenders use to determine your interest rate also vary. For example, Dun and Bradstreet will take nothing but your payment history. Experian and Equifax consider public records, legal filing and collection agency.
Those with a low credit score can get a business loan, but their options are limited.

3. Shore up Your Business Credit Score

Hopefully, you’ve avoided mixing your personal and business finances. Overlapping accounts complicate your business loan eligibility and even your taxes. The earlier you establish a separate business account, the better, as you build a business credit history this way.

4. Improve Your Credit Score Before You Apply

Review your credit report and settle all overdue bills. You can even consider consolidating your credit card balances into a personal loan, a move that impresses the credit bureaus and lenders because you’re paying off a higher level of the capital on a regular basis. The personal loan sends the signal that you aren’t looking to a bankruptcy filing to escape your debts.
Reducing your credit balances also improves your credit score, particularly if you use only 30% of the credit banks are willing to lend to you. Also, do not close an account just because you’ve paid it off. Keep that credit line open.

5. Make a Specific Request

When applying for a business loan, borrowers get farther when they know their numbers (as anyone who watches Shark Tank knows well.) Be ready to show the lender the figures behind just how much money you need to accomplish your goals and what those goals will do for the business. This is also where a thorough business plan can come in handy.

6. Study Financial Statements

Prepare the business’s income statement, balance sheet and statement of cash flow. After this you can prepare the documents like tax returns and financial statements. Lenders will demand all of these documents to determine whether you can pay the principle and interest over a period of time.

A+ Rated First Financial Specializes in Business Loans for ALL Credit Scores

Ready to get the money to hire a new employee, acquire crucial materials or open a new branch? Apply with First Financial for a business loan and a representative will contact you within 24 hours to answer all your questions. Our automated systems and lower marketing costs translate into lower rates and fees to the business borrower. We’re proud to provide the funds America’s small businesses need to propel the economic recovery and employ others.

First Financial

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