Business Loan Options Blog

Every business can benefit from software, however, like any expense, it should be purchased with an eye towards the cost to benefit ratio. There is software on the market to do just about anything one can envision these days, but much of it is overkill for a small business, or insufficient for larger companies. There are online business loan calculators and off the shelf accounting packages. Matching the software to the business it serves is very important. You should know what function you want the software to fulfill and how that will impact your business processes, and how that relates to the final cost of the product.

Are You Trying To Save Time?

Maybe you are buying software to save time doing some particular business function. For instance, if some of your employees are updating social networking sites, you might want to automate the process to keep things flowing. You can order a service that charges you monthly and allows you to schedule tweets to Twitter. If you plan on doing this for a long time, it might be better to look at a downloadable piece of software that you install once, if the features are similar and the pricing for a one-shot deal makes sense in comparison to the monthly service. Do a cost analysis on how much time your employee will save, versus their working wage, and how much it will cost to implement software to save that amount of time over the course of a month, six months, or a year.

Are You Trying To Make Some Task Easier?

If your main goal is to make life easier by having the software do a task for you that generally is much harder to do manually, then your assessment needs to take into account the skill level of your employees and the complexity of the software, as well as the cost. If you have the idea to add some accounting software to help make payroll easier, these packages can be rather costly. They also require training to get your staff ready to use them. It’s truly an investment in your company and software that takes such a central role to your company needs to be implemented correctly. Don’t pour a lot of money into a software solution if you can’t also train your staff on it too. The software will only be as good as the people using it. For that reason, when you do the cost to benefit analysis, take into account the time it will take to get your staff up to speed on the new way of doing things.

Are You Trying To Keep Up With Technology?

Companies often upgrade and implement technologies they’re not ready to implement. Getting online and having a website is essential for all businesses today, but without knowledge of the technology, small business owners can fall prey to marketing that sells them on much larger, or complicated, sites than they need. Businesses need to stay focused on the bottom line and only implement technology solutions that will provide them with a solid return on their investment. For that, there need to be metrics put in place at every step of the game to make sure that the solution is providing real value to the company, and not just a fancy way of doing the same things that were more cost-effective before they were modified.

Put Your Requirements Down On Paper First

When building a software solution from the ground up, a specifications document is written to evaluate all the functions and feature of the new piece of software. Even if you’re buying an off-the-shelf package, it’s still a good idea to list all the requirements you want your software to accomplish, before a single piece of code is programmed or a product chosen. Evaluate more than one solution against the cross grid of requirements and see which package does what you want at the price that you can afford. Include additional factors in your cost analysis like the ease of learning the package, or the necessary platform you may need to purchase in order to install the package. In addition, if business processes need to be modified because of the limitations of the software, you will want to know beforehand how that impacts your productivity. Having already thought these things out beforehand and putting them down on paper can provide you with a thoughtful analysis that saves you money by picking a software solution that is just right for your business and keeps you level-headed enough to avoid the hyped solutions that are costly and won’t work well with your business.

Are there changes you wish to make in your business?  Making changes in the current economy is a bit risky, but on the other hand it may be necessary.  When you own a small business or any business it is a great achievement.  You do not want to see your vision, hard work, and dreams go to waste.  For this reason you might be seeking a business loan you might be able to use towards making changes in your business.  But, can you afford the business loan you want?  To understand if this is possible, use a business loan calculator.

A business loan calculator is designed to give you an accurate look at whether you can afford a loan or not in your business.  The calculator will also save you time in having to do some intricate calculations on your own device or worse in your head.  There are key elements to the business loan calculator that will help you explore different options and what type of business loan you can handle.

You can seek a certain product from the banks, but that does not mean you will be awarded the business loan you want.  For example, if the business loan calculator helps you figure out that you need a 10 year loan at 6 percent in the amount of $250,000 it doesn’t mean the bank will be willing to offer you that product.  We will look at why you would still want to seek a business loan and why the calculator has helped in a moment.  First we will examine the elements of the business loan calculator.

The calculator has a place for you to put in the amount of the loan you want.  You should have an idea of how much it will take for the changes you are projecting in your business plan.  You may also wish to add in the expected closing costs, though these can change.  You have to factor in the closing costs to ensure you do not apply for too much on the loan.  The interest rate can also be put into the calculator.  The current rate for most loans is 6.5 percent, but you may not be awarded that amount.  You should change the rate to various amounts to see if you can afford the higher interest and still get the amount of the loan you require.  The loan term, start date, and results can then be inputted.

The results should be shown so that you see the monthly payment, how much interest will be paid and how much the loan will actually be if you take the loan term to its completion.  In other words if you have a 10 year loan how much are you actually paying out over those ten years for a loan?  It matters because you need to be able to make the payments, but more you will want to see if you are paying more in interest than the loan was actually worth.

Now let’s go back to why the loan calculator can be helpful to you even if the bank will not award your ideal loan.  The calculator will tell you without any indecision what you can afford in a business loan.  You can adjust the interest rate, payment amount, and the loan terms.  As you adjust these three options you will narrow down what you want, what you can afford, and your absolute last choice in a loan.

In other words you may want a 10 year loan at 6 percent and for $250,000.  The bank is unwilling to give you that, but with $100,000 at 8 percent for 10 years you can afford the loan.  The amount is smaller, but you still have the potential to make some changes in your business that would generate more revenue for you.
In the end you are able to get a business loan that will help spark advancement in your business.  It may not have been what you desired, but it is at least a starting point.  You also know that by getting a business loan that generates more income you can refinance it later or pay it off.  Once it is paid off you can use the progress in your business to get a larger loan and finish off the advancements you have been working towards.  You should never attempt to get a loan you cannot afford.  You should also have a good idea of what is a viable option for your business.

Leadership, management, and networking skills are some soft skills that all entrepreneurs must learn to increase the size of their business. People skills come naturally for some people, while other learns by doing. Not everyone that is a great leader is also a great manager. Managing the day to day finances takes a lot of knowledge of different business loan options available. Leaders may prefer to delegate the details of day to day operations to managers. Networking can also be a skill on its own. Honing each of these talents will eventually lead you to greater success in business and life.

Leadership

In order to inspire people to work for you and your organization, you have to have some leadership skills. Like the lead goose in a flock of geese on a mission to head north, the people following you are going to look to you for direction. It’s not just about having confidence in your own abilities, it’s about inspiring others to perform at their peak performance because they trust your ability to lead them towards success.

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Starting a business can happen in a variety of ways. It can be a burning desire to be your own boss, a part-time gig to help bring side income for those still employed or in retirement, or it can be due to a passion to provide some product or service. All these reasons are valid, but ultimately, the real winners in business are those that obtain a measure of life satisfaction with their choice. The main goal of business is to be profitable, however, when you’re doing the thing you love, that typically is icing on the cake. Many more people are jumping into business to generate a measure of life satisfaction that is not available through traditional career paths. This doesn’t mean that they can skip the basic understanding of business loan alternatives and financing, it just means that there is an additional component to choosing their niche. Planning to obtain life satisfaction with your business is not as hard as it sounds, and here are a few things to consider when going into business to maximize this potential.

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You’ve probably heard the analogy that cash flow is the life blood of a business. Yet, it’s one of the most difficult things that a budding entrepreneurs to understand. Even seasoned business people can have lapses in cash flow that threaten the survivability of their company, and it can come from unexpected places, like a bankrupting client. There is always something new to learn about the cash flow of your business, but one of the ways that most business people try to manage it is to establish lines of credit to pull from when there is a cash gap. At some point their business education in cash flow, business owners will discover all sorts of lending from equity lines of credit to merchant cash advances.

Learning More About Cash Flow

Just like blood is pumped through the body and has to maintain an adequate pressure in the body, the cash flow in your business requires a steady supply to keep your suppliers and your employees paid, and to deal with financial emergencies. You can’t really use only your business receipts to supply all your cash flow unless you have significant investments and savings to borrow from on a bad day. Otherwise, most businesses will use cash loans to help support the activity of their company, when something happens to offset the delicate balance of receivables to accounts payable. If you are having trouble collecting your payments from customers, this in turn can affect the amount of money that you have to run your business. If you run out enough to keep you from paying suppliers, they may refuse to do business with you or levy fees for late payments. If you don’t pay your employees on time, you’re also in a great deal of trouble.

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The stimulus has had a positive effect on the economy, and the potential for future growth. While jobs are still scarce, this provides the best opportunity for entrepreneurs who are wondering if now is a good time to do a startup. Some of the best companies actually started during recessionary times, as these times afford opportunities for business owners that aren’t available during periods of growth. It can force new entrepreneurs to be creative with small business funding, while increasing the need for innovation. Take stock of your business idea, dust off your business plan, and think about getting started now, until waiting when things are actually on the road to recovery. You will be glad you started early and picked up some of the perks that are available for new business owners during tough economic times.

Financing Is Easing Up

A few short months ago, it would have been clearly impossible to raise funds for your new business. The markets are slowly thawing and investors are looking for great ideas and good companies that will be the next big thing. Some areas around the country are also showing signs of recovery in their housing markets. If you have a home, you can refinance and pull some funds out to start a business, assuming you have equity in the house. You may also be able to sell it now, and use the funds to help start your business.

Still A Large, Cheap, Labor Pool

While no one wants to be unemployed, the fact is that millions are unemployed and running out of benefits soon. As a startup, you have your pick of quality talent that may be having a bit of bad luck with the job market. Even if you don’t want to hire people full-time, there are plenty of people who would love a part-time or temporary contract position to help them make their mortgage payments or put food on the table. If you wait until the job market picks up and recovery is well under way, you’ll be competing with far larger companies who will snap up the best talent quickly. Right now, is the best time to check out who is looking for a job and trying them out. If you hire them as contract workers, you can take them on permanently once the recovery is well under way. This gives you leeway to scout out the best workers and train them before things start to really roll.

Best Training For Lean And Mean Operations

A recession is the best time to learn how to run an operation on a shoestring. This will help you develop a company that is lean and mean, efficient from the ground up. If you were to start later, when the awareness of the tight economy has faded, you and your employees would be more lax about everything and it your business processes would end up costing you a lot more over the life of the business.

You Can Get Equipment And Space Cheaper

When you start up, you need to rent premises, get equipment together, and all that costs money. However, in a recession the cost to buy space is often far less, due to people defaulting on their mortgages of commercial property or businesses shutting down. If you want a prime business location, lock in the lease now, while these offers are still on the market. After the recovery takes hold, more people will be jumping in trying to ride the wave up, and the rents will go up too. If you have the money to buy, the deals for commercial property are rock bottom.

Similarly, you will have to buy equipment to get your place of business up and running. You can get fantastic deals on office equipment and instead of waiting to depreciate it over the years, there are now some government incentives that allow you to depreciate 50% of it this year. If you want to buy vehicles for your company, this incentive can apply, and can be a smart tax move. As always, before buying something that you think will help you on your tax bill, check with your accountant to find out the pros and cons of such a move. With the American Recovery and Reinvestment Act of 2009 there are numerous rebates and deductions that have changed, and can help a new business get off the ground running with far less monetary investment. Take the time to find out what those are, and pull those expenses into the year where they apply and can help your business get off to a good start.

All the components of your business may be in place, but you’re still not attracting the level of sales you now you should have. Do you blame the economy or take a cold hard look at your sales strategies? It could be that just a slight change in your business strategy will yield the results that you know are possible. Lots of business are re-evaluating their operations to see what they are doing right and what they are doing wrong. In tough times, it pays to look under the hood and review your finances, your sales strategies, and your infrastructure. Whether it’s checking out better business loan interest rates or revamping your heating system, there are ways to make any business more efficient with a little thought and planning.

Financing

Take another look at your books, even if you have someone doing them for you. Now’s the time to be really clear about your income, your expenses, and your credit lines. Are there ways to reduce high interest rates by converting the loans into something more manageable? How can you create more cash flow in a time when credit is tight? The recession is a great opportunity to stop doing business as usual and instead seek a higher level of performance. You probably wouldn’t be as motivated to find those savings or seek out creative forms of financing, if things weren’t as tough as they are now. The good news is that when the economy recovers fully, you’ll be happy knowing that your business is much more streamlined and ready to profit better than ever before.

Sales Strategies

Are you taking every opportunity to sell your wares? Do you have a website that is bringing in sales leads, not just costing you hosting fees? Is your staff trained to recognize when they can turn a small sale into a much larger one by up selling techniques? Does your website have programmed back end offers or are you just selling one thing at a time? Do you actively create sales campaigns online that can help bring traffic to your offline businesses too? If you don’t understand how to get your sales strategies to another level, get a mentor in business who can help you revise the problem areas.

Infrastructure

Now is the best time to take a look at your business infrastructure. There are multiple government incentives to help reduce your energy costs with rebates on heating and cooling systems, as well as insulation. Commercial real estate has never been a cheaper and moving your place of business to a better location can reap rewards in a higher traffic pattern to your door. If your equipment or cars are getting old, you can even depreciate more of these costs than previously on your taxes due to changes in the tax code enacted with the stimulus bill. It may mean you have to spend some more now, but the cost of doing it later is going to be much more, and it can make you far more competitive in the future.

In a recession, only the wildly optimistic business owner would think they’ll experience unbridled success upon opening their doors. Yet, we’re at the point in the economy where the recession is fading and the recovery could well be under way. Where business was marching to a death dirge, it’s now becoming clear that some businesses are experiencing a revival. Restaurants, in particular, are a business that are starting to experience more business, making them prime candidates for having their success potentially sabotage their level of quality, their customer service, and their final over all survival. All businesses should think on how to manage larger loads of customers, and how they will shift from a skeleton crew of staff to a market that demands a larger work force, almost overnight. That can include reviewing merchant cash advance companies for the time when their growth exceeds their capacity to keep up with it, due to short cash reserves to hire help. Without the necessary preparations, they could find themselves falling behind.

Can You Handle More Customers?

It’s one thing to have a great product or service that everyone wants and is willing to buy. However, it’s quite another to not be able to supply the massive demand, when that happens. It means customers get frustrated, walk away, and often don’t return. Whether you are a restaurant or an Internet site, you are going to be sure that if suddenly your product or service explodes overnight that you have a plan in place to supply that demand, whether you have to hire more people or implement new technology. A small blog for instance, might get featured on a mainstream news site and then the traffic stream explodes overnight. If the hosting service can’t handle it, the site can go down and this will not only kill the new traffic, but also discourage prior subscribers too.

Can You Ramp Down, If It All Goes Away?

Like the Christmas rush for toys, some businesses experience a swift increase in orders due to seasonal issues, and then the demand dries up as quickly as it arrived. This can be deadly for a small company that has ramped up hiring, and retained full-time employees in the expectation that business will continue to flow unabated. This is exactly what happened to many businesses during the boom of the 1980′s and 1990′s. They just kept hiring, kept increasing the size of their businesses, and kept getting more complex. They didn’t pay close attention to the demand because they assumed it would always be there, once established. Today’s businesses have to be more flexible and pay attention to how the economic environment is impacting their bottom line in order to quickly adjust to decreasing demand.

Boom and Bust Cycles

Until a recovery is fully underway, the economic climate is going to be like riding a roller coaster. The business owner has to remain flexible and pay close attention to what’s going on with their business, from cash flow to inventory. During boom times, cash should be set aside for the potential down cycle to weather those better, as we now understand credit can dry up during those times too. During bust times, use the reserves and concentrate on bringing in new business with creative strategies.

Financial Management Can Help

As a business expands, the growing pains may require a new facility, new staff, more technology, and any number of extra expenses. Without proper financing, a growing company can literally implode under the pressure of trying to expand along with the demand, yet not having enough financing to sustain the necessary changes in the infrastructure. That’s why it’s important to think very big when planning out your company, and then you can start small. If you’ve thought out the repercussion of a large organization and the financing necessary for that growth, you’ll have the necessary knowledge to know where to go when the time comes to get bigger. Always seek out financing and credit lines that can remain untapped until they are required to produce the results you want. These can include conventional home equity and bank loans, or unconventional sources like merchant cash advances. If you know ahead of time what it will take to be approved for a particular loan, you will have your ducks in order when it’s time to pick a loan. You may find that after all your research, the unconventional loan works better to resolve a cash flow emergency, without straining your potential for growth and future success. Start small, but think big, and this will help you to prepare ahead of time for when success knocks at your door.

Have you considered globally expanding your company?  Perhaps you have looked at loans for business that could help the expansion yet find they are not quite the thing?  Globalization is an increasingly popular idea among businesses, even small businesses.  Despite the growth the international market has seen many small businesses are still hesitating regarding going global.  Owners think it is too complicated or they cannot afford the expansion.  We have five myths that we will discuss below to show you that you should not fear expansion.

1. Lack of Capital to Fund the Expansion: Yes, this is a common statement or fear that small businesses have.  Small businesses feel they cannot expand to the global market due to a lack of resources, which never affects the large corporations.  Of course this is not true.  Any business has the ability to approach a bank for a loan.  Sometimes even the corporations will be turned down for a loan depending on how much capital they have to put towards the new expansion.  It could also be that the corporation does not have a good market to enter into and therefore they are turned down.  As a small business you do have options for getting into the global market.  The Export Import Bank of the US, US Small Business Administration, and the US Department of Agriculture loan program are three ways you could obtain the funding you need to expand.  These organizations provide assistance to a business with a good market, business plan, and strength to go global.

2. Things are Uncertain and You Are Confused: Knowledge is power.  If you are confused about how to expand then gain the information you need to clear up certain things that you do not understand.  Yes, looking from the outside in things can be uncertain and confusing, but you already know how to run a business.  You are just looking to expand it where the laws may vary from what you know.  Luckily you have the ability to hire advisors who can protect your global interests. They can help you understand the laws and find out about overseas business aspects that could be risky.  For example trading partners can be a bit risky, but with the right advisors you can find the person you can trust.

3. Shipping is Way too Expensive: Really?  Have you looked into how much it would cost to ship your goods?  Businesses have an opportunity that individuals do not have.  It can be expensive for you to ship a box to your relative overseas.  However, when you increase the amount you ship to a specific region there is a cost effective solution.  Businesses can accelerate, streamline, and enhance the shipping processes available to them.  There are shipping software applications as well as shipping companies willing to deal with you and your business volume.

4. It used to be that you should start in a local community and then grow to be global. However, this is no longer correct.  The internet has made it possible for you to start out global and then reduce yourself to a local economy.  You will have to consider what it would take to begin a website on a global reach, but this is rather easy.  You need a website that translates into the local language and a calculator to look at international shipping costs.  The web is one of the most powerful tools you have for expanding globally or even starting out with a global business because often the pricing is acceptable based on what the client is able to access.  You may find your pricing is actually lower than what a local company is offering for the same item.

5. Small Businesses are Incognito: Some individuals claim that their small businesses are not going to get the attention they need to expand.  They feel they are unimportant based on the number of businesses out there.  However, more and more customers are looking for the smaller business.  They are done with corporations increasing costs just because they can and not offering quality.  On a global scale more customers are looking for the unique, quality items a smaller business can offer, and they are willing to pay for it.

Try to take advantage of newer online technologies to help you reduce printing costs. If your company has always sent out catalogs every year, by choosing to put them online and sending out emails to your subscribers, it can significantly reduce your printing costs. There are multiple ways to make use of the Internet to reduce your printing costs. Some are obvious and others are not. It’s up to each individual business to decide what areas they are willing to put online, but the less you print the conventional way, the more you save in printing expenses. The only time that doesn’t make sense is when the audience would have trouble purchasing items online, versus from a catalog, then even if you have to get additional merchant funding to print, it’s necessary to do so. At any rate, here are few ways that you can save money, if you are a business owner, by using digital technology to replace much of the costs of printing and mailing.

Business Cards

When was the last time you actually collected a business card and used it to calls someone to make a purchase? Let’s face it. As a business tool, they are time-limited. You hand someone a business card, and more often than not, if it’s not put into a database somewhere, the person will toss it in the trash, leave it at the bottom of their purse, or use it to pick their teeth. It’s just not tool it once was as people rely on online tools more than paper slips to store all their information.

You shouldn’t get rid of business cards all together, but you can reduce the need to print massive numbers of them. Simply create an e-business card on a service online that lets you even send these via email or directly from one phone to another. The advantage is that the information that is transferred with wireless from one phone to another is stored in their phone databse of contacts, which is far easier to retrieve these days than a paper card in drawer or in a rolodex.

Catalogs

Another place that business are being cautious with printing costs this season is in mailing out catalogs. Why mass mail thousands of catalogs and receive very little in the way of orders? You not only pay to develop the content of the catalog, the printing, but also the mailing too! There has to be a better way! Fortunately, there is. Many companies are learning to feature their catalogs online. While you still have to pay to develop the content, you don’t have to pay to print or mail it anymore. For all this to work, you should try to subscribe people via your email lists to help notify them when a new catalog is available online.

Coupons and Discounts

Encourage people to go to your website to see your virtual printing, instead of expecting a catalog at their door. You can do this by offering coupons and discounts from your website, instead of inserted in the pages of a printed catalog You can advertise the coupons and discounts by way of signs at the checkout of a retail store, or by signing up to other offers. Even if you don’t use a catalog to sell your wares, there are numerous businesses that can benefit from online coupons and discounts.

Restaurants, for instance, may offer their customers a discount coupon when they leave to encourage them to visit again. Others may put their coupons in packets that advertise local businesses. However, you have to pay for the printing and distribution of these coupons. If, instead, you offer the URL to where a valuable coupon can be printed offline, next time they visit, they’re more likely to check out your website. Once there, they might sign up for your email list, if you offer them a good deal for doing so. Either way, if they know they can be notified of specials and get valuable coupons online, when they’re ready to visit you on their schedule, instead of a coupon’s limited expiration cycle, they will be more likely to visit your site and also your restaurant. The added benefit to you, the business owner, is that it saves you from printing out special coupons and paying to have them distributed in a business packet. Instead, you can print the URL at the bottom of an existing receipt or invoice as a way to thank your customers for patronizing your business. It’s a clever, yet profitable way, to do the same thing without having to pay the same for the service.