If you have a great idea that will fill a need in the marketplace, now is the time to test your idea and give the people what they want. However, starting and maintaining a company will take sufficient liquidity. Therefore, it may be beneficial to obtain a business loan before you start operations.
Build a Relationship with a Lender
Relationships are critical in the business world. When people know you and know that you do great work, they are going to be more likely to want to partner with your business. This is true whether you are trying to attract customers, attract investors or get a lender to provide your company with capital to buy equipment or field orders. As you pay down your loan, you will build a positive credit history and feel better about having someplace to go when you need money in the future.
Prove Your Idea Is Worthwhile
The best way to prove that your idea is worthwhile is to get someone else to provide money to make it happen. If you can't get a loan or you can't get people to order your product ahead of time, you know that it may need refining or other tweaks before you get to market. If you are able to get a loan, being able to repay that loan gives you extra incentive and motivation to make the best product or offer the best service possible.
You May Not Be Able to Fund the Project Yourself
Technology companies can take hundreds of thousands or even millions of dollars to get off the ground. Therefore, your only option may be to get a business loan to buy equipment, pay workers and possibly pay yourself a salary before you are profitable. Getting a business loan may also be a better alternative to raiding your 401k or other personal savings accounts. While some choose to fund their own businesses, you don't want to risk not being able to pay your bills while in the startup phase.
Starting a company can be a fun challenge for those who are trying to gain more control over their careers and lives in general. However, it can be months or years before you finally see any money from it. Therefore, you will need to find financing to keep your company afloat long enough to either sell it for millions or grow it into a cash cow for yourself and your family for years to come.
I hope you enjoyed this article on why you may need a business loan for your lean startup or bootstrapping business.
Interested in more articles about starting a small business?
Read My Posts:
- How To Overcome Your Fear Of Starting A Business
- 3 Tips To Improve Your Business Outsourcing
Best Of Luck In Business To You All!
Michael J. Schiemer of Schiemer Consulting
Enthusiastic Entrepreneur & Owner of Frugal Business
Digital Marketing, Social Media, & Entrepreneurship on a Budget
Bootstrap Business: Money - Marketing - Motivation
Mike Schiemer Builds Better Business
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