Big Things Entrepreneurs Forget About Financing

You’ve started a business, you’re making money, and all is well. So why would you need to think about financing, right? This is a common mistake that first-time businesses owners make — only thinking about extra cash when they’re running low.

As Eyal Lifshitz points out in his recent article in Entrepreneur many business owners don’t realize that being proactive and thinking about financing before they need it could benefit them greatly. For one having extra capital will allow you to focus more on running your business instead of watching the numbers. Additionally you’ll have more time to assess all of your options instead of taking a bad loan as a last-ditch effort.

Speaking of options small business owners now have more than ever. In addition to an increase in the number of outlets for loans, thanks to online and alternative lenders, entrepreneurs also have choices when it comes to different types of financing. For example, if your business isn’t in need of cash at the moment but you want a safety cushion, you might consider a business line of credit that you can access whenever you need. There are also options more limited in scope such as invoice factoring that may be worth looking into as well.

One thing that might worry newer entrepreneurs about taking on loans or other forms of business financing is the cost. However it’s important to not only look at the cost of a loan but the return on investment you’ll get from it. For example, if you’re looking at purchasing a new machine that can produce your product four times faster, you would want to take that added efficiency and labor cost savings into account when deciding whether it’s worth financing the purchase. All too often business owners actually leave money on the table and do themselves a disservice in an effort to prevent “wasting” money on interest.

When it comes to business financing it pays to plan ahead. By taking the time to research all of your options before you need them you’ll be able to find the best financing choice for your small businesses. Additionally be sure to keep in mind the ROI you’ll get from a loan instead of letting the costs alone dissuade you.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Uber Relaunches UberPool as UberX Share

With demand for travel continuing to rise, the ridesharing app Uber has announced a feature to help both travelers and commuters to get to their destinations while saving money. After previously pausing its UberPool service option during the pandemic, Uber is now rolling out a replacement called UberX Share. At this time, the new option is available to riders in New York City, Los Angeles, Chicago, San Francisco, Phoenix, San...

Split Payment Platform Kasheesh Launches as Alternative to BNPL

In recent months, "buy now, pay later" (BNPL) platforms have exploded in popularity. What's more, with Apple jumping into the space, the practice is likely to continue growing despite some concerns in regards to how BNPL services impact consumers' personal finances. With that in mind, one FinTech has just revealed its alternative: a payment-splitting platform for online retail. Today, Kasheesh exited stealth mode to announce the launch of its unique...

Credit Karma Money Spend Adds Cashback Offers for Cardholders

Those looking to add some extra cash back into their pocket will soon have a new option. This week, the popular credit monitoring site Credit Karma announced a new feature for its Credit Karma Money customers. Now, debit cardholders will be able to earn cashback when making purchases from select retailers. According to the site, the list of eligible retailers includes national chains, such as Adidas and Shake Shack, as...