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Why take a business loan

We explain when, why and how to take a smart and fast business loan. There are so many alternatives and pitfalls out there regarding corporate loans to businesses.

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When is it a good time to take a business loan?

It is always a split opinion about when to take a business loan. Some people might say that you should grow organically with your own revenue and financial power. Although, it is really hard to grow without external financing. Almost one hundred percent of all the larger companies have taken, and have active, loans. Using three simple questions, you can easily find out if it is a good place to borrow money and avoid unnecessary risks:

  • What should the business loan be used for?
  • How much money will you borrow to your business?
  • How will the money be refunded?

Read more: here.

By thinking about how you can work smarter and more economically you have a lot to win when you use a smart business loan. Use it to grow or stop a temporarily need for funding. Do not use it to just keep your nose above the surface.

How is business loans best used?

If you have short-term liquidity needs and are sure that money is coming soon - then a corporate loan is a good option for your company. However, if you agree to start a brand new business in an area where you do not have experience or customers, or if you know that it will take a long time before the turnover is gaining momentum, it is better to invest in the owners making money for it is possible. Can not existing owners set up should you chase new owners. If you have a company that has exciting products, crowdfunding can be an option, but if you have a more down-to-earth business, you will have the best chance to find money with those you already know.

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How is business loan profitable?

In order for a corporate loan to be profitable, you should consider what happens if you do not get the funding you need. What are the cost of lost business opportunities and what would it mean if you had the money? Make a simple calculation and compare the cost of the loan against future earnings. Sometimes it can be hard to predict how much more profit you will be making. Then it is better to be careful and not take any foolish risks.

How to use your business loan?

Is it difficult to get business loans at the bank?

Many small companies are denied corporate loans at the bank. Often the application procedure is also long and has collateral requirements. You have to show them a lot of paperwork and documents from your company. For many banks, corporate loans of less than SEK 500,000 are often unprofitable, as the bank's internal costs are becoming too high. Banks are therefore increasingly focusing on large corporate loans.

Reasons why not to take business loan

How long does it take to get a business loan?

It is not uncommon that it may take several weeks or even months for major banks or governmental institutions to grant a corporate loan. However, there are alternatives to the banks, smaller players, which grant less secure mortgage loans faster. If you apply today you will have the money on your account the next day. To compare to the banks when it can take weeks or even months to get the money in your account. By then, the moment might be gone. From private lenders, like here

Reasons why to take a corporate loan

When should I not take a business loan?

You should not take a business loan to cover a long-term loss. It will only worsen the situation. Instead, tackle the problem directly to achieve profitability. Once the problem is resolved, a business loan may be necessary to get back on foot.

So if you have a small business and see a potential growth in the near future - take a business loan to accomplish your goals. To buy stock, invest in inventory, equipment, hire employees, cars, an office or something like that. A short term business loan is perfect for seasonality activities. To prepare for christmas and get revenue to pay back in january.

Calculate how much would a loan cost?

Apply for a company loan

Before taking a loan for your company, you would like to know the business loan cost. Check out a provider that have a fixed fee and no cost for early repayment on their Business Loans today!