How to Get The Most Out of Your Small Business Funding

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.

Financing For Your Type of Business

Success in small business means understanding the capital needs and cash flow issues that might arise for your specific type of business. Every business needs working capital, but a consulting business won’t have the same types of capital needs as a lawncare business or a small manufacturer. Let’s take a look at a few types of businesses and how their capital needs differ.

Consulting

Consulting businesses provide expertise and insights to individuals or organizations for a fee. If you’re financing a consulting business, human resources are your most valuable capital asset. They may be experts in management, advertising, technology, or law or have highly specialized knowledge in a field like ergonomics. Other companies are willing to pay for their insights, but first you have to pay them.

If you’re launching a new type of consulting, it could be 30 to 60 days before you collect (your client pays their bill) on your new services. During that time, you’ll have to pay your consultants, or “carry” the cost of your employee. To do this, you’ll need working capital to hire staff and cover payroll.

Manufacturing – Launching a New Product

You’ve got a company and you have plans to start building a widget that will meet a growing demand and capture market share while offering better value and quality than your competitors. The timing is right. The opportunity is there. It’s time to launch a new product… but there’s a lot to pay for first.

Before you can start selling your widget, you have to cover the costs associated with producing it, assembling it, marketing it, and housing it before you ever make a dime in sales.

Baking, Landscaping, Construction, or Car Washing

Thinking of expanding your bakery, landscaping business, construction firm, or car wash? New stoves can cost between $1,000 to 10,000 plus the cost of ventilation. The cost of an additional lawn care equipment package including a mower, trimmers, a blower, and trailer can set you back $4,500. For even the smallest skid steer, you could face an up-front capital cost of up to $12,000 to $15,0000. Adding a bay to your self-serve car wash so you can wash more cars? Over $17,000.

Expanding your business is a big investment. You have to finance your capital investment before you make a profit. Luckily, there are new types of funding that make it faster and easier for small businesses to access the working capital they need to grow their businesses.

Idea Financial Provides Funding for Your Type of Business

Idea Financial provides fast access to working capital for all types of small businesses. Use your funding to cover payroll, hire new staff, invest in new equipment, or launch a new product. It’s up to you. Apply within minutes, get approved in hours, and access funds within a day, all without dealing with a bank.