19 Jun Successfully Managing Your Small Business Loan
There are nearly 30 million small businesses across the United States. If you are a proud small business owner, you know how difficult it can be to get through the first year or to expand after you have outgrown your present location or staffing. Securing a small business loan is a great way to help your company thrive.
Here are a few tips to help you manage and make the most of your small business loan.
Understand the Terms of Your Loan
Any small business loan comes with a variety of conditions. Understanding them will help you manage your cash better and ensure you do not accidentally violate these conditions. For example, if you are planning to pay off the loan early, a small penalty might be charged. If you have other accounts with the bank, you may also need to maintain a certain balance.
Your loan may also allow you a grace period where you don’t pay late fees if your payment is made a few days after your due date. The bank will also provide you with information about the payment schedule and the penalties you will incur, if you default on the loan.
If you face financial hardship after taking out the loan, check the terms to discover if the bank has any solutions, such as a short-term interest reduction or a loan extension.
Invest in New Employees, Merchandise, and Equipment
After securing the loan, investing it wisely is the best way to make the most of your increased cash flow. Spending that money on hiring new employees, training your current employees, and getting new equipment and additional inventory will help you not only keep up with your increasing needs but also expand your business even further.
Upgrading your current equipment to the latest models will help increase your employees’ productivity. If you have popular merchandise in your store, giving your customers easier access to it by increasing your inventory will help improve customer satisfaction.
Take advantage of this loan by adding new and different inventory to your business, as well. For example, if you own a women’s clothing boutique, consider adding pieces by different designers or expanding your business by offering men’s or children’s merchandise. Training your employees to improve your customer’s experience is another great option.
Investing in marketing and upgrading your current website are other great possibilities.
Paying Your Small Business Loan
Establishing a great relationship with your bank by securing a small business loan will benefit you now and in the future as your company continues to expand. Maintaining this relationship is critical, and the easiest way to do this is to make your loan payments on time and manage the loan money wisely. Making your payments on-time and maintaining communication with your bank will allow you to secure future, and larger, loans for your small business. Here are a few tips to help you manage your loan and payments:
- Create a separate account. Keeping your loan payment separate from your regular business account will allow you to target your spending, rather than accidentally putting it toward unwanted expenses.
- Utilize online banking. Create a separate online banking account for the loan. This allows you to keep a close watch on your spending, and loan balance.
- Utilize automatic payments. A missed or late payment can lead to unnecessary fees, and will hurt your credit score. Ask the bank if you can set the date of your monthly payment.
Securing a small business loan is a great way to grow your brand and create a new relationship with your lender. Aside from providing you with loan money, your bank is a great resource for growing your small business. Ask about other business banking products that will help you get back to business faster.
If you have any further questions, don’t hesitate to contact the professionals at Unison Bank.