5 Signs Your Business is Ready for a Loan

If you find yourself wondering what is holding your business back, it might be time to consider a loan. Every company could benefit from an increase in cash flow, but additional financing could transform your operations if the timing is right. Some small business owners wait until they are in need of funding to shop for a loan. Even if your business is doing well, you might be in the perfect place to apply for financing. There are five signs that indicate your business is ready for a loan that will set you up for long-term success.

Your Business is Strong and You Don’t Urgently Need Financing

When your small business is experiencing financial hardship and in need of extra funds, it’s not always the right time to invest in a loan. You are actually best suited for a loan when business is thriving. This may seem counter-intuitive, but you want to plan ahead when expenses are low and cash flow is high. This approach better sets you up for success before you hit your off-season. Lenders will look more favorably on your business when you can present growing revenues and a positive credit profile.

You Are Turning Away Business

If opportunity is knocking and you can’t answer, that is a good sign that your business is ready for a loan. Perhaps there’s a chance to take on a big project or expand your practice to a new location that would take you to the next level. Without the right financing, your business may not be able to keep up with the pace of demand, and missed opportunities will become more frequent. Envision how you see your company growing and accomplishing its goals. If you can’t make the leap without additional financing, it may be time to apply for a business loan in order to take on those game-changing opportunities.

You Have a Great Credit Score

Pay close attention to your credit score. Every time you make an important financial decision, your credit keeps a track record. Great credit cannot be accomplished overnight. It requires an active approach to build a reputable borrowing history, diversified lines of credit, and consistent payment schedules. Achieving a great credit score is no small feat, and you want to get the most mileage out of it as you can. Applying for financing while having great credit means you can enjoy more affordable loans, fewer fees, and better rates and terms.

You’ve Outgrown Your Space

Another good indicator that it’s time for a loan is that you’re running out of space to successfully operate your business. A term loan or line of credit can allow your business to expand and gain additional room for success and growth. Expansion can mean more than just adding office space or a new location; it can include increasing inventory, new equipment to complete orders, or funds to invest in your next big project. Take an objective look at your business structure and determine if space is holding you back. If you find there is no office for a new hire, no space for added inventory, or operations are limited or inefficient due to lack of physical space, then it may be time to apply for a loan.

You’re in The Research Phase

If you have been considering a business loan for some time, you may be facing internal roadblocks that more financing could help you overcome. Even after you have crunched the numbers and done diligent research, setting a plan in motion can be a challenge in itself. Consider what major factors are holding you back from making a decision. When in doubt, it is always a good idea to consult a lender for a second opinion.

If you feel like any of those five indicators fit your business, there is a good chance you are ready for a loan. Getting in touch with a lender who understands your business and the challenges it faces is a great way to start. Our experienced team of lenders at PlainsCapital are equipped to help your business take the next step. Speak to a local and reliable loan expert who will help match the right loan to your needs and guide you through the process. Visit our Business Loans page to learn more.