Sometimes you need to borrow money to grow – and that's okay. Every business has financing needs from time to time, whether it’s for short-term working capital or long-term investments.
Many business owners find the key to successful growth is working with a trustworthy and knowledgeable lender. And it’s important that a lender is qualified to help you weigh your options and determine the best approach for you and your business.
No matter what your priorities or goals are, a lack of financial resources doesn’t have to hinder the ability to grow your business. Here are some considerations to keep in mind when you are looking to secure the funds needed to boost your business to the next level:
Know your lender
Choosing the right lender to work with is critical to securing the financing you need. You should establish a relationship with a lender you trust and respect—and even consider this person a partner. A reputable lender should understand your goals and have access to the resources you need to successfully carry out your plan.
Know your needs
It’s important to consider the stage your business is in to make it easier to map out a plan with your lender that matches your goals and needs.
Are you just getting started? Launching a new business can be costly, but don't let that deter you from achieving your dreams of becoming a business owner. Adopt a clear, pragmatic approach and take time to define your goals and estimate the startup capital you’ll need. Use this handy calculator as a guide.
Already up and running? Consider how much you have to invest in your business to make it grow. Maybe you need to make renovations, purchase new equipment, or update technology.
Is your space adequate or should you move to a new location? Success and location often go hand in hand. Whether you expand your existing space or you’re ready to relocate to a spot with better foot traffic, the goal is to try to minimize costs and maximize your working capital.
Know your options
A lender will explain all the various lending options, but two of the most popular are: equity lines and term loans. They both have advantages, but the choice usually comes down to how you’ll use the funds and how quickly you need access to them.
- Equity Lines. An equity line provides a quick cash infusion to meet day-to-day cash shortfalls. It also offers the flexibility to borrow a larger amount. Features and benefits of a Line of Credit vary by institution. A general sample can be seen below:
- Lines from $50,000-$20,000,000
- Best for businesses with $1-$50 million in sales volume
- Secured or unsecured with collateral ranging from accounts receivable to corporate or personal assets
- Variable rates
- Interest-only or fixed principal (plus interest) monthly payments
- Revolving use of funds that you control
- Term Loans. Need funds for business expansion or asset purchases like equipment or vehicles? A term loan with monthly repayments can be easier to manage and can also boost your credit profile. Features and benefits at a glance:
- 5- to 7-year long-term financing for expansion projects, equipment or tenant improvements
- Customized and predictable repayment terms over a fixed period
- Fixed or floating interest rates
- Secured by collateral such as business assets, vehicles, equipment or accounts receivable
Ready to start a business or take yours to the next level? From short-term needs to future opportunities, Lakeland Bank is always here to help with the financial solutions you need. Contact our commercial lending team to learn more about our lending options or complete our online form to Request a Loan Consultation or download a Commercial Loan Application.
If this information was helpful, you may be interested in one of these blogs: Planning for Retirement as a Business Owner or 4 Scams Your Business Might Not Detect.
