10 Dos and Don’ts of Small Business Finance
Carmen Dye
Mortgage Broker at Belle Financial Solutions | Home Loans | Refinances | Business & Commercial Loans | Equipment Finance | Refinances | Insurance
I’m always on the hunt for relevant info and I loved this - one of the best articles I’ve seen on this topic for a while. Here are a few paragraphs as a taster...
What Is A ‘Small Business’?
A small business is usually a:
- Privately-owned company or
- Sole proprietorship or
- Partnership or
- Family-owned firm
By its very nature, a small business has less revenue (and therefore profit), fewer employees, fewer owners and a smaller scope of operations than a larger company that is publicly-owned or otherwise.
Finding finance for your small business may be challenging and even overwhelming. However, it is not an insurmountable problem as long as the business owner is rational, strategic and thinks long term.
We have compiled a useful list of Do’s and Don’ts for small business financing. If you are an entrepreneur looking to finance your business for any of the reasons we have already explored, read on:
DO Borrow The Right Amount At The Right Time
Your financial plan will help you understand how much you need to borrow and for what purpose – expansion, marketing, hiring new personnel, new value proposition, new equipment, etc. You also need to be strategic by understanding the options available and by choosing the right time to borrow. Too early and you may spend the money on unnecessary/low-value/low-return things. Too late and you may put too much financial pressure on your business. Be systematic, and equally important, know your own business.
DON’T Be Afraid To Take Risks
Bank loans are not the only option available to small business owners. Be strategic in applying for financing by keeping an eye on your credit score (and how it can be affected), by understanding the costs associated with each lender and by understanding which assets you may have to sacrifice if you can’t repay the loan. At the same time, don’t worry even if you have to start from scratch. Even with no revenues, customers or employees, small businesses can get financing to get their operations going.
Pretty valuable stuff, I’m sure you’ll agree! Why not check out the whole article HERE and share your thoughts with me afterwards: call (0414) 934 277 or email me at [email protected].
Thank,
Carmen