Alex Shvarts, CTO of FundKite, recently published a byline on SmallBiz Resources titled “4 Questions Small Business Owners Should Ask Before Taking Funding.” The article discusses what business owners should take into consideration when seeking financing and how to have the best funding experience throughout the process.
It starts as follows…
“Financing your small business with an outside funding source is perfectly common, but that doesn’t mean you shouldn’t take precautions and educate yourself beforehand. If your business is in a position to take on outside funding, there are several questions you need to ask yourself about cash flow. Whether you’re looking for additional working capital to cover an emergency or finance an opportunity, one fact remains the same: you need to be able to pay back more than you borrowed.
“Why Is Small Business Funding Necessary?
“Some people wonder why business funding is necessary, why can’t the company save up themselves and finance their own projects without wasting money on interest? While some companies can do this due to low-cost projects or high-profit margins, many businesses have large expenses to cover and spending that much money upfront would strain cash flow.
“Business debt is a necessary part of growing the economy. If the economy is not lending, then businesses are not growing. In order to reach the next level in growth, businesses take on loans, credits and funding to help raise their operations and cover initial overhead expenses. Just like college students invest in their career with student debt that will pay off with higher-paying careers, businesses invest in their own projects that will pay off more in the long-term and otherwise would not have been achievable without outside funding.
“Here’s how you can make the most of your business funding experience by avoiding common mistakes and ensuring you’re smart about investing.”
The byline addresses four questions total: Why Is Small Business Funding Necessary? What Common Mistakes Do Business Owners Make When Using Funding? What Are The Best Practices For Using Funding? What Options Are Available?
By bringing awareness to common pitfalls, business owners can hopefully avoid these mistakes before they happen and have a smooth funding experience. There are a lot of questions you should ask before taking funding for your business, but if you choose your funding program wisely and invest the money smartly, you can grow your business and bring prosperity to your company.
You can read the full article on SmallBiz Resources by clicking this link.
To learn more about cash flow tips for seasonal businesses, read this article.