Applying for and receiving small business funding is a huge accomplishment. You’re taken a crucial step toward expanding your business and setting yourself up for growth. But as you begin to channel your money and energy into realizing your business goals, it’s very important to make a plan for managing your small business funding or line of credit.
Idea Financial has worked with many small businesses and we’ve seen what works. Here are a few tips for success.
Make Your Funding Work For You
The most successful recipients of small business funding make their money work for them. They have a clear plan for making a profit and are able to quickly make returns on their investments. They then use that profit to pay back their small business financing.
An example might be an online seller who uses their financing to boost their inventory, then quickly makes a profit and repays their loan.
Make a Plan for Repayment
Before even applying for small business funding or a line of credit, it’s a good idea to sit down and make a plan for repaying it. At which points in your business cycle will you have cash available to make payments? Talk through your plans with someone at your company and make sure your plan is realistic.
Once you’ve secured your funds, set up reminders and checklists and build repayment into your calendar. Share the schedule with someone else so that you’re accountable to it.
Avoid Loan Stacking
After you receive your funding or line of credit, you may see offers from other small business lenders offering a “better” deal or a “lower” rate. It may be tempting to think about taking out another loan. However, they aren’t necessarily calculating their interest in the same way, and these loans may cost you more over time.
It’s never a good idea to loan stack. Loan stacking involves taking out multiple loans from different lenders at the same time. Taking on debt from multiple lenders will make it more difficult to manage your debt. Most lenders also have clauses prohibiting such practices.
Use Idea Financial as Your Mini-CFO
Idea Financial has small business advisors on hand to help you use your funding to grow your business. Your funding from Idea Financial also includes a dashboard to help you manage your funds.
Apply now for small business funding or a line of credit through Idea Financial and charge your business forward.