No way around it: Starting a business is challenging. As the saying goes, if it were easy, everyone would do it. And being successful is about having more than having the right ideas, services, and drive. For many entrepreneurs, running an operation can be an overwhelming enterprise, as it places demands on them that may be simply beyond their scope.
In cases like that, having the right partners in place – people they can trust and turn to for advice and assistance – can truly mean the difference between flourishing and folding.
For a significant number of my small business customers, having the available cash to run their company is a real and ever-present concern. In the case of start-ups, I find that many underestimate the funds needed to both launch and sustain their operation, a doubly stressful endeavor.
Managing finances can be one of the most challenging responsibilities facing any SMB owner. When used properly, business credit can provide the financial relief necessary to manage cash-flow fluctuations. That, in turn, allows the owner to pursue opportunities to improve and grow the business. This is where a trusted partner can help them understand their credit options, so they can identify and leverage the financing structures that meet their needs.
The responsibility of making it as simple and understandable as possible for business owners to decide their best path forward – and why – lies with the business's banking partner. Generally speaking, credit cards are best suited to making everyday business purchases, such as supplies, office equipment, and monthly vendor payments, whereas a business line of credit typically is used for smaller purchases, spread out over time. If the business finds itself in the position of needing access to funds all at once, a business loan is probably the most appropriate option on the table.
Deciding if and when business financing is right for your operation can be difficult. Should you apply for credit, here are some of the key factors that will be evaluated:
- Credit History: How have you managed previous credit?
- Ability to Repay: Is your business profitable? Is it cash-flow positive?
- Capital: Do you have enough personal capital invested in your operation?
- Collateral: Do you have assets that can be used as collateral to secure the loan?
- Business Experience: Are you experienced in the industry in which your operate?
Business owners who know the factors used to determine their creditworthiness are more prepared than those who don't, and the chances of them arriving at their desired outcome are higher, too. From my perspective, the more I can help my clients with their business needs, the more they can focus on their business, and at the end of the day, everybody wins.
If you have questions about financing options or any other business banking-related matters, please send me an email
or give me a call at (608) 497-4600
today. Helping small business owners realize their operations' full potential is my passion, and I would welcome the opportunity to assist you in doing just that.