Small Business Tips

Big Things Entrepreneurs Forget About Financing

by Jonathan Dyer 4

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.

Comments are closed.

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

Personal Finance

Credit Bureaus Once Again Extend Free Weekly Credit Reports

by Jonathan Dyer
An offer that was introduced at the beginning of the pandemic has once again been extended. This week, the three major credit bureaus in the United States — Equifax, Experian, and TransUnion — announced that they'd be continuing their free weekly credit report program for consumers. Now, the feature will be valid until the end of 2023. Prior to the pandemic, consumers were entitled to download a copy of their...
Credit Cards

Marriott Bonvoy Unveils New Cobranded Cards From Amex, Chase

by Jonathan Dyer
In a much-expected move, Marriott Bonvoy has announced the launch of two new cards that will join their cobranded line up. These cards are the Marriott Bonvoy Bevy American Express card and the Marriott Bonvoy Bountiful Card from Chase. Both the Bevy and Bountiful cards earn 6x Marriott Bonvoy Points on purchases at participating Marriott Bonvoy properties, 4x points on purchases at restaurants worldwide as well as at U.S. supermarkets (up...
Small Business News

Small Business Banking App Lili Introduces Lili Academy

by Jonathan Dyer
Oftentimes, when people think of the "entrepreneur spirit," they assume it means striking out completely on your own. While setting your own course and working for yourself can be key reasons why individuals elect to start a small business, the truth is that there's no shame in seeking some help. Luckily, there are now a number of free resources entrepreneurs can utilize to help teach them important business topics and...