We’ve all seen the videos. Make passive income from home with my crash course! Sign up now! Then, the person on the screen shows checks and bank statements, fancy cars, and luxury apartments to “prove” how they got rich fast with a few quick tricks. You could get rich too, they tell you. You just have to pay $500 for their course. If they did earn enough to buy a condo on the beach, chances are it was from selling their course, not because of the “savvy” skills they are trying to sell you.
If you’ve seen commercials like this, they probably set off your alarm bells. As most small business owners know, there’s no fast track to success. Even if a business takes off in its first year, it will continue to meet challenges. Successful business development takes financial resilience and sound decision-making. It’s rarely easy and certainly not quick. If it were, everyone would be wealthy.
Often, a business will get a jumpstart that leads to early success. Perhaps a social media influencer endorsed their product, or they found the right niche at the right time. But it’s difficult to maintain that upward momentum. Competition, local and national economies, and waning consumer interest can cause setbacks and even lead to a crisis. This is especially true for first-time business owners, and why 20% of small businesses fail in their first year.
Believe it or not, there’s one great thing about setbacks – they present an opportunity for growth. With sound decision-making, business owners can recover, learn, and find themselves in a better place than when they began. It takes access to the right tools and the knowledge of when and how to use them.
The start of 2020 was a tumultuous time and set the economy on an unprecedented track. Many businesses were forced to close their doors, and not all of them reopened. However, during COVID lockdowns, cash was available, and interest rates were low. Over the past three years, 14.8 million new business applications were filed, according to the U.S. Census Bureau. Those numbers show an increase well over 2019 numbers. Until 2020, the annual number of new business applications hovered near the 3 million mark.
Even though your business might be thriving, it’s no time to be complacent about financing. This is when to build a budget, create cash flow projections, bring up your credit scores, and invest in growth. Working with a broker at the start of your business can get you connected with commercial real estate loans and equipment loans to help you start building equity. If you need to bring in inventory, a broker can help you with factoring or hard money loans.
Now that cities have lifted the lockdowns and a sense of relative normalcy is returning to the world, the economic landscape has morphed into something less hospitable. We’re in a scenario where it’s much harder to access funds. Interest rates are up, inflation is reducing consumer spending, and the cost of money is higher. Banks are refusing more and more loans because they’re restricting lending.
The financial decisions you make at this stage can have critical consequences. It may be your first impulse to seek a working capital loan or a short-term loan to bring you out of a rut. But, depending on how you use them, these loans might not be the best choice. Your broker can show you how to apply funds efficiently, so you’re not spinning your wheels. A working capital line of credit, for example, isn’t an ideal way to purchase equipment. A broker can find a great deal on an equipment loan or lease that puts your money to work smarter.
If your business is struggling to get back on its feet after a setback, you can bounce back with the right financing. An SBA loan might be right for you if your bank has turned you down for financing. When your credit score is slowing you down, a broker can show you hard money loans, factoring, and secured lines of credit that don’t require a high score to qualify. For every challenge, there’s a financial tool that can help. The key is knowing when and how to use them.
It’s impossible to be an expert in everything. You started your business because you have an idea you want to share with the world. Your expertise might be in restaurant management, medical diagnostics, construction, etc. But, even if you’re a financial expert, you can always tap into the knowledge and resources of a professional broker who has the expertise to meet each challenge with the right toolset.
Brokers apply the right money in the right places to help your business overcome setbacks. No matter where you are in your business journey, you need to get the right financing. No one is in a better position to help you do that than your broker. Because they spend years building close relationships with their lenders, they can access deals you won’t find anywhere else. So, take control of your balance sheet and talk to a broker today!