(Newswire.net — August 9, 2013) Wallingford, CT–Every company will likely need to take advantage of Business Loans at some point. Few companies have the cash flow to support every one of their business needs all the time. This is especially true for those who want to expand. There are ups and downs, peak and valleys, in every industry and even strong businesses need help during difficult economic times. Those who are profitable enough to support expansion may want to take on some debt to invest in their infrastructure, training programs, or to purchase other companies to diversify their operations.
Having some debt is actually helpful as it gives business flexibility to invest in real assets that have physical value. If the investment is going into salable merchandise or raw materials that are going to be manufactured in to products for sale, then they must make enough profit to pay for the loan. However, borrowing to invest in new equipment, real estate, or other resources that will appreciate in value over time, is smart. This is a way to use inflation to support the borrowing as the purchases will have more value over time. Companies that keep all their liquid assets in cash will see a net decline in value as inflation increases. If the business slows, there will be greater losses that could make all the savings disappear.
The threat of uncertain business conditions makes diversifying more important than ever and borrowing is the best strategy to do it. In tough times, appropriate assets can be sold and can even be used to secure additional borrowing to get through the tough times. As conditions improve, it is easier to pay back loans. This can be a dangerous process for companies who do not pay attention to trends. Those who are ready for changes will be able to prepare for challenging financial times so they can survive and even flourish.
There are commercial loans designed for companies in different industries. Loan officers familiar with a variety of industries will be able to effectively review applications. A well planned out strategy, available assets, and payment plans, are all issues that will need to be addressed. Showing the lender that the company is borrowing from a position of strength will make it easier to get approved. Those who are struggling and do not have a plan are not as likely to get help, as the money will be even more difficult to pay back.
The commercial real estate loan rates tend to run about 10 – 12%, which makes a plan even more important. This is a valuable resource for every company of every size. Large corporations will need to borrow just as much as a small home business, the only difference is scale. Bigger businesses will need larger loans to get by in the short-term. Small businesses have a great opportunity to establish valuable credit with lenders, which makes these loans an important asset for every company to use. As more credit is established, larger loans can be taken out which will make it possible to grow the business even faster.
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