As a small business owner, you know it takes money to make money. To meet growing demands, you may need to increase your payroll. If you don’t have the liquidity to support hiring, consider borrowing options that can help you bring on new employees. A small business loan or business line of credit can give you the working capital you need to expand your team without restricting your cash flow for day-to-day operations.
Small business term loan
A business term loan can give you access to the short-term funding you need to cover hiring costs. Typically, it has a lengthier financing period than other borrowing options, which can mean lower monthly payments and more time to repay your debt. Term loans also differ from other types of small business loans, including equipment and real estate loans, because they can be used for any business expense. Lenders offer them with both fixed and variable rates, as well as a range of terms. If you opt for a term loan to increase your working capital, use a business loan calculator to get a rough estimate of how much you’ll be able to borrow.
Business line of credit
A business line of credit can be a convenient way to get the working capital you need grow your team. It offers you revolving credit, which you can use to pay your new employees. As they generate income for your business, you can pay down your balance, and reuse your available credit. A business line of credit can also help you maintain your buying power during slow periods. Like a small business loan, it offers you the flexibility to cover any expense.
Choosing the right working capital loan for your business
Before you start the application process, create a budget. Review your expenses, seasonal sales, online business checking account balance and project commitments to figure out how much working capital you need to hire new employees. Then, speak with a lender to determine whether a loan or line of credit is better suited to your business’s needs and financial standing. You should see what borrowing options are available from the financial institution you bank with. Having an established relationship with a lender could improve your chances of securing a small business loan or line of credit.
Sponsored content was created and provided by RBS Citizens Financial Group.