CF Saskatchewan Blog

Show Me the Money! 7 Smart Reasons to Get a Small Business Loan

  • September 6, 2016
  • Written by Community Futures Saskatchewan

While it’s not always the case that a loan is the right move or best idea, there are a number of situations and circumstances where going into debt for your small business is incredibly sensible, smart, and strategic.

If you’re ready to take a leap and move your business to the next level, but you lack the working capital to do so, here are seven great reasons you might seek out additional or alternate sources of funding:

1) Your need a new place or more space.

If you’re a bricks and mortar business, expansion, renovation, and/or relocation is likely to be a major consideration on your radar. In many cases, a move or a substantial facelift may be essential to the continued health and growth of your business, yet neither are inexpensive endeavours. If you’re reasonably certain that physical improvements or a new location will sustain or increase your success, it’s wise to explore options for the necessary funding.

2) You’ve got big plans for the future.

If you’ve got your sights set on large-scale growth down the road, chances are good that you’ll be shopping for significant financing at one point or another. By starting with a smaller, short-term loan, you are strategically building your business credit history and enhancing your capacity to qualify for larger amounts in the future.

3) You need to upgrade or acquire equipment.

Equipment is a major priority for most operations. Not only is it imperative to keep what you’ve got in tip-top shape for quality assurance and uninterrupted service, you may be looking for ways to innovate or increase efficiency. Consider a loan if there’s equipment that could serve to enhance your business or streamline your services in a way that can positively impact your bottom line.

4) You require more inventory.

Inventory is typically one of the largest expenses for small businesses, while also being one of the most frustrating elements as well. It’s an age-old dilemma - you require goods to generate revenue, but you don’t have enough capital to build out your stock. Assuming a reasonable amount of debt might mitigate this classic “chicken and egg” conundrum that plagues so many start-ups.

5) You need more hands on deck.

When launching a startup or running a small business, you typically wear every imaginable hat, especially in the beginning. However, there usually comes a point where it’s no longer reasonable or smart for you to be doing everything on your own.

If adding an employee or two could heighten productivity, bring in more sales, and free up your time to focus on the most high leverage aspects of the business, you should consider doing so as soon as you’re able. A small business loan might afford you the opportunity to bring more talent onto your team in order to scale your venture and subsequently, your revenues.

6) You need to get the word out.

Many small business owners struggle with marketing and promotional efforts, whether due to a lack of time, money, or expertise. However, strategic advertising is absolutely vital to consistently attracting the clients/customers who keep your business viable. Securing additional resources to amp up your outreach and brand awareness is an investment that is sure to produce positive returns.

7) You’re in a sticky spot.

It’s nearly impossible to predict the curve balls and unexpected (and often unpleasant!) surprises that are guaranteed to come your way on your business journey. From a broken piece of important equipment to an astronomical tax bill, things routinely happen in business that can range from minor inconvenience to major emergency. Whether it’s a setback or speed bump, a small business loan might be an option to swiftly get you back on track.

If you require financing to start or grow your business, check out our loan products and contact your local Community Futures office today!

Community Futures specializes in helping Saskatchewan businesses in rural areas and small towns get access to financing and business advice that is not typically available through regular banks or credit unions.