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Five smart reasons to get a loan for your small business

If you're presented with an opportunity for your small business, but don't have the cash on hand, you're likely wondering if it's a good idea to get a loan. However, you may be hesitant because the process seems daunting or you're unsure if it makes sense financially.

You might be surprised that taking on some debt can actually be the best choice for your business, allowing you to operate more profitably.

Reason 1: To expand your business

Whether you're moving to a larger office, opening a new location or adding to your product line, it can be hard to save adequate capital to pay cash for necessary steps to help you grow. Or you might find yourself needing to pivot your existing business due to market conditions. By taking out a loan, you can grow your business now, ideally boosting your profits.

Reason 2: To have more inventory on hand

Seasonal businesses, such as those that cater to tourists or have the majority of their sales around the holiday season, often see their cash flow diminish during the slower time of year. Unfortunately, this typically coincides with the exact moment they need to pay out a sizable amount to stock up in preparation for the robust sales period ahead. Over time, this may help your cash flow to even out those peaks and valleys. A loan can help you bridge the gap until the merchandise is sold.

Reason 3: To build your team

By hiring someone who specializes in needed functions, your business will run more smoothly, and free up your time to focus on the activities which matter the most, whether it's making sales calls or reaching out to key customers. Funds from a small business loan can also be used to invest in the talent you already have. Helping to build skills will make them more valuable to your business and feel more engaged in their job.

Reason 4: To lease or purchase equipment

Most owners find additional or higher-quality equipment can help them run their business more efficiently or effectively, thus generating more profits. For example, if you run a screen-printing business, you might find a large-format printer can help you expand your product line into a larger more lucrative area. Equipment and machinery financing is much like a car loan in the equipment itself is the collateral (like the car), which makes it a relatively easy loan to obtain as you work to establish your credit.

Reason 5: To establish credit

In what can seem like a frustrating cycle, often you need credit to get credit, especially when you're trying to acquire a large loan. So, if you foresee a need for a more sizable loan down the road, it can be smart for you to procure a smaller loan in advance to start building your credit and reputation with your lender. Responsibly paying it back can help establish a valuable relationship when the time comes to apply for a larger loan.

Working with a local credit union, like Valley Strong, can often be the best way to obtain a loan; they will take the time to talk to you about your unique situation and match you with the best product for your business needs. In many cases a loan backed by the Small Business Association (SBA) can offer favorable terms. With an SBA loan, you'll work directly with a lender like Valley Strong, to access the capital, you need.

Wondering if a small business loan might help you achieve your goals? Contact Senior Business Banking Officer, Eric Steinback, at (661) 833-7418, visit http://www.valleystrong.com/, or stop by the Valley Strong Tehachapi Branch to see how you can get the process started.

Valley Strong is federally insured by the National Credit Union Association. Equal Opportunity Lender.