Businesses want money for many reasons. This post will look at the 10 most common reasons businesses want a business loan and some of the best programs for them. If your business needs a loan for any reason, complete the application information below.
10 Most common reasons businesses want a business loan
1) My business is running out of money.
Very often, businesses do not need money for a specific reason. They just are running out of cash. This can also happen during emergencies and times of crisis. During emergencies, essential businesses can often get special business loans from state or federal programs. Seasonal businesses often have this problem. Sometimes revenues do not meet business expectations while expenses remained fixed. The business may have run into problems and needs money to correct or resolve the problem.
2) I need a business loan for expansion.
One of the top reasons businesses need a business loan is for expansion. There are many reasons for expansion. In most cases, a successful business wants to take advantage of business opportunities but needs more money to do it.
3) I need a business loan for taxes.
Customers frequently make the request, “I need a loan to pay business taxes”.
Many businesses need a loan to pay taxes. This is often
for current taxes, previous taxes as well as IRS payment agreements.
4) I need a business loan to hire employees and meet payroll.
Another reason businesses often need capital is for the initial expense of hiring employees. This often includes the cost of expanding the workspace, buying furniture and also the cost of recruiting, interviewing and adding employees to the employee rolls. Many businesses fall short on their cash flow at times and look for ways on how to get money for payroll.
5) I need a business loan for inventory and raw materials.
Businesses often need funding for inventory and raw materials. Business
owners need specialized funding for this purpose.
6) I need money for Equipment, Equipment Repairs or Vehicles.
Businesses often call in with the request, “I need a business loan for
equipment”, as well as “I need a business loan for equipment repairs”. This would
be considered a loan against equipment.
7) I need a business loan for Marketing and Advertising.
Companies frequently need a business loan for Adverting and Marketing. Advertising is more critical for certain industries than others. Industries that need advertising, such as media companies, retail and online businesses have to spend significant funds on
8) I need a business loan to buyout my Partner.
Businesses will often request a business loan to buy out another partner. Multiple owners are no longer able to get along well enough to continue running the business together. Callers will call in saying: “I need a business loan to buyout a partner owner.”
9) I need a business loan to buy a Building and Real Estate.
When businesses become larger, they not not want to keep leasing space. Landlords may also suddenly raise the rent. Callers most frequent requests are: “I need a business loan to buy a building and property”, or “I need a business loan to buy my building.” For this
purpose, callers say they need an asset based loan.
10) I need a business loan for insurance.
Businesses may need to pay for several types of business insurance.
Liability insurance, employee insurance and property insurance are some of the types of insurance businesses must by. Callers will also call in and say: “I need a loan for business insurance”, as well as “I need a loan for business health insurance.”
FAQ Frequently asked questions on the 10 Most common reasons businesses want a business loan
Why do businesses need loans to borrow money for?
Businesses need loans for many reasons. For example, common needs are working capital, expansion, taxes, to hire employees, payroll and inventory. Other reasons are equipment, repairs, vehicles, advertising, partner buyouts, rental leases and insurance certifications.
Who needs a business loan?
Businesses of all types need business loans, including large and small businesses, start up and new businesses for instance. Businesses are often better off financing specific needs instead of using cash on hand they may need suddenly or for an emergency.
What can you use business loans for?
Business loans can usually be used for any legal reason. If a lender does not want your business to use funds for certain reasons, it will usually be stated in the contract or they will tell you.
What can a business not use a loan for?
Businesses cannot use a loan for illegal purposes. It is also common for a lender to restrict a business from using a loan for specific reasons. For example, a lender may not allow you to use a business loan for personal reasons. If a loan is made to purchase an asset such as equipment or real estate, the loan must be used for that reason and cannot be for anything else. The lender may even pay the seller directly instead of sending funds to the borrower to avoid monies being used for other purposes.
Thank you for visiting our list of the 10 most common reasons businesses want a business loan.