6 Bad Habits You Need to Stop Making with Business Loans
As a small business owner, you sometimes need business loans and financing, but if you aren’t that familiar with lending it’s easy to make mistakes and develop some bad habits. Break these habits, like not using loans often enough, turning to the bank for loans, borrowing the wrong amount, and failing to plan for how to spend your cash, and develop smart business borrowing habits instead. With the right loan, the right loan amount, and a good plan for how to spend it, you can start using business loans more wisely.
1. You Resist Using Business Loans
This is a bad habit you simply have to break. Not using business loans just doesn’t make sense if you are running a small business. Cash is necessary to survive and thrive in the business world, and it is especially important for small businesses. For a smaller business, the tide can change so quickly. One bad month can ruin you, which is why you need to occasionally rely on business loans.
Using business loans and having debt are not necessarily bad things. Debt and borrowing can be healthy and positive. It helps you build good credit and keeps you afloat during tight times. Loans also help you move forward. If your business is always just barely treading water, you are only surviving, not thriving. Having the extra cash from a loan helps you push forward and actually grow and expand.
2. You Keep Going to the Bank for Business Loans
It’s a hard habit to break, but going to the bank for your loans is something you want to reconsider. Although there are exceptions, most banks don’t offer loans that are meant for small businesses. They may lend to you, but the terms, the size, and the cost of the loan are not necessarily optimal for your needs as a small business owner.
In fact, bank loans can get you into some trouble if you’re not careful. Many banks won’t offer the smaller loans that many small business owners need. You may find yourself trapped in a loan that is way too big and that you struggle to repay. This is a case of bad credit and debt, and it is a situation you want to avoid.
Instead of turning to the bank, you need a source of small business loans. BoomingBusinessLoans.com offers loans that are tailored to the needs of smaller businesses. We offer things that the bank can’t, like smaller loans, faster loans, and an easier process to getting approved. What small businesses need is what we can offer.
3. You Borrow Too Much, or Too Little
A common problem with going to the bank for business loans is that they offer very little flexibility in the amount you are allowed to borrow. Most banks are offering loans that are better for larger business. These are loans that are $50,000 or bigger. And while there may be times that you need that much money, or even more, most of the time small businesses only need a few thousand. You can easily get overwhelmed, in trouble, and late on payments when you borrow too much.
On the other hand, you may have the bad habit of borrowing too little. Don’t get enough money from your loan and you won’t be able to meet the goals you have set. It can be difficult to determine exactly how much you need, but you can break this bad habit with a little planning and by choosing the right loan. Our loans are flexible in terms of amount. You can choose between a few thousand and a few hundred thousand. Plan out your expenses and only borrow as much as you need.
4. The Business Loans You Choose Have a High Credit Score Requirement
Stop choosing loans that are so hard to get approved for. This is a big mistake that too many small business owners make. There are business loans available that have much more reasonable requirements for approval. These are the loans that are designed for small businesses because the lenders know that you can’t always meet the same requirements as big businesses.
You need to look for loans, like those we offer online, that have a more reasonable minimum credit score requirement for approval. Low credit is a big impediment to getting approved for so many business owners. Here, you only need to have a score of 500 or higher. Other requirements include having been in business for three months or longer and monthly revenue of at least $10,000. These allow many more small business owners to get approved for loans they need.
5. You Wait Too Long to Get Business Loans Cash
Stop waiting for the money you really need to keep your business going. Too many loans that you can get as a business owner take forever. The application process is a lengthy nightmare; the time you wait to get approved is too long and has you biting your nails in anticipation; and then when you do get approved the time it takes to actually get the money from the loan could actually sink your business.
Instead of settling for this lengthy process and long wait times for cash, try a loan that will make every step easier and faster. With our loans you start online, so it’s immediately easier and faster. The application is simple and short, and you can expect to get an answer on being approved the very same day, often within minutes. When you get approved, the loan gets funded much more quickly than with other types of loans, like bank loans. Within just a few days you’ll have the cash in your bank account, ready to be accessed and used for exactly what you need.
6. You Have No Concrete Plan for the Business Loans You Get
You’re eager to grow your business, or to get through a slow sales period, so you apply for and get a loan but with only a vague and fuzzy notion of how you’ll spend the cash. This is a bad habit to get into because you are likely to end up wasting money. You need a plan and a concrete one before you borrow, first so that you borrow exactly how much you need, and secondly so that you make the most of the money you’re getting.
Before you even apply for business loans, lay out a plan for your loan. Maybe you will spend the money on a new hire, so think about what that will cost you. Or, maybe you need to rent a piece of equipment to help you be more productive. How much does that cost, and have you priced out several companies for renting? Taking the time to really plan how to spend your money is the best habit you can get into as a small business owner.
All of these bad habits can hurt your business, but they can also be changed. You don’t have to keep making the same mistakes over and over again. Learn a little bit more about how business loans work, what your options are, and how to spend money for your business and you’ll start to turn those bad habits into the habits that will help you be successful.