This Small Business Week, Reinvest in Yourself

  •    Benji is CEO of Behalf, a B2B platform that provides instant working capital financing of up to $50,000.

This week is National Small Business Week, a time specifically dedicated to celebrate the contributions of entrepreneurs and small business owners, like yourself. And there is a lot to applaud.

Small businesses produce nearly half of the US’ goods and services and are responsible for two out of every three new jobs created. It’s clear that the lifeblood of the economy doesn’t just come from skyscrapers or ivory towers, but rather from the 28 million small businesses operating throughout America.

As you reflect on all you have accomplished thus far, you may start thinking about your current challenges too. According to The Federal Reserve Bank of New York, the primary concerns for small business owners are access to credit and maintaining healthy cash flow.

Funding Your Future

Navigating the different financing options, from loan size to lender type, can seem overwhelming at times. Nevertheless, effectively managing your access to cash flow to fund growth is the only way for your business to reach its full potential.

Here are a few ways to approach credit so that you ensure your financing is helping and not hindering your business:

Outline a specific need or set of needs

Articulating exactly what you need the financing for will direct you to the best credit fit for your company at each point of refinancing. Do you need a small loan to fund these needs, or a large loan? Will you repay the loan slowly over a long period of time, or is this a short funding gap you are trying to fill? These factors will determine the cost of the loan, so being specific will help you select the right credit option without incurring unnecessary costs.

Consider your ideal repayment timeline

When evaluating financing options, keep in mind your natural cash flow peaks and valleys to ensure you select a repayment plan that works for your business cycle. For example, some industries have peak seasons of 2-3 months in which they make a large percentage of their yearly sales. If your business fits this model and you are using the loan to refinance costs over slow periods, making regular and small payments could be better for your business.

Take control of your credit​

Once you understand your financing needs and ideal repayment schedule, you can research the best credit for your business. One bank loan no longer fits all, and with the rise of FinTech you can accurately compare numerous financing options with desktop research. You can use payment calculators to understand the total cost of financing, plus evaluate other factors such as speed of funding, coverage, and impact to your credit - all prior to choosing a lender. If you are seeking help with making a large purchase, it is also good practice to ask your vendor whether they offer Trade Terms in-house or via a financing partner.

With a knowledgeable and clear understanding of your needs, you can feel confident accessing the financing you need to grow your business.