If you own a small business and it is doing well, you may make the mistake that you do not see any need to obtain financing. However, this is the best time to find financing, when you need it the least. Let’s review some of the advantages of getting funding when you don’t need it:
1. Better negotiation power with the lender. This is where it becomes fun talking to banks about business financing; they need to sell you on their loan and service but you don’t need it.
2. Banks are more incline to give you a loan. Having positive cash flow will make your banker fall in love with your business. Lenders like to see that the business is successful and operating in the black.
3. Find alternative lending sources. Private lenders are always looking for businesses to lend to, that’s how they make money. When things are going good, it is easier to attract all kinds of loan offers and you can use this to your advantage.
4. Build you credit now. In many cases the bank will want to lend you money only if you have established great business credit. Think back to when you first got personnel credit, most likely you need a cosigner or you could only qualify for small loan amount. The lender wants to see if you paid back the loan on time before they will lend you a larger amount. It works the same with business credit.
The take away is when things are going good for your business; take advantage of your position. Lenders will compete to lend you money. Negotiate with lenders for the best terms. Take the time and find alternative sources of working capital, even if you need to say no to the money, you may need that private investor later in your business cycle. If you need to work on building your business credit starts now and may be with lower loan amounts. Work your way up to the really big money.
When your business is doing well, it’s the best time to take the steps necessary to make it great!<-->
Business Credit, Business Loans, General
business credit, build business credit, business loans, business financing