8 Signs It’s Time to Apply for Small Business Funding

Planning how to use small business funding

Applying for funding is an experience many small business owners share, especially when they’re just starting out. Once you’ve repaid your initial start up financing and have settled into a comfortable rhythm, it can be difficult to take the plunge and apply for another loan. After all, why should you apply for funding if you’ve gotten your day-to-day operations down to a science?

It’s not always obvious when it’s the right time to apply for funding, but there’s one telltale sign that will tell you it’s time to give it some serious consideration: you’re ready to grow your business.

Whether growing your business means adding more or better products to your line, improving customer experience, hiring more employees, boosting your promotional efforts, or even expanding to a new location, growing requires working capital. Lack of cash flow is the most common problem reported by small business owners, and it can seriously halt your growth and stymy your plans for your business’s future.

Small business funding can fill these gaps and provide the working capital you to keep growing your business. Here are 8 signs it’s time to apply for funding:

1. You have a steady stream of regular customers.

A healthy supply of regular customers shows that there is consistent demand for your product or service, and that your business is doing a good job of meeting (and even exceeding) your customers’ needs.

It costs more to acquire a new customer than it does to retain an existing one, so if you find that you have more repeat business than new business or that you simply aren’t seeing as much new business as you’d like, it may be time to apply for funding that you can use to promote your business, incentivize referrals by offering deals to loyal customers, or implement other growth strategies designed to generate and retain new business.

2. Your customers are asking for something you don’t offer or can’t keep in stock.

If you notice that a lot of your customers are asking for a particular product or service that you don’t offer, it may be time to apply for funding to help jumpstart that new project or product offering.

On the other hand, if you regularly run out of a product that customers are asking for, funding can provide you with the resources you need to restock and purchase more inventory to meet demand.

3. Your profits are stable and steadily increasing.

If you have an account balance roughly equal to about two months worth of operating expenses and your profits show consistent long-term growth (2-3 years), you’re doing something right! This is a good sign that it’s time to invest in your business. Supplementing your own investment with additional funding can help kick start even more growth.

Steady profits make it much easier to be approved for additional funding. In fact, it’s often more beneficial to apply for funding when things are going well, even if you don’t have immediate plans to grow. When you’re in a tough spot and profits are low or unstable, you’re less likely to be approved for the funding you need to turn things around. Plus, successfully repaying a round of funding makes some lenders, including Greenbox Capital®, more willing to lend to you again, which could come in handy if business slows down and you need an infusion of working capital in the future.

4. Your industry is growing.

When your industry is in a growth phase, it’s often a good time to scale or expand your business. Small business funding applications for enterprises in growing industries are more likely to be approved, making it easier for you to access the funding you need to keep up with (or get ahead of) your competition, or future-proof your business by investing in new training, upgraded equipment, and other initiatives that will help you stay on the cutting edge.

On the other hand, expansion may not be a smart move if your industry is stagnating or declining. That doesn’t mean you can’t benefit from additional small business funding—it simply means that the way you use your funding will differ. Instead, focus on how you can improve your services and stand out from your competitors.

5. You have more business than you can handle.

If your business is so busy that you can barely keep up with demand, it may be time to hire more employees or expand your space. Even with the boost in business, you may not have the cash on hand to hire or expand—small business funding can help you do both of these things so you aren’t struggling to keep up or losing out on new clients.

GREENBOX TIP: Make sure your uptick isn’t seasonal or the result of other unsustainable factors before you apply for funding to support your growth.

6. Most of your profits come from a single customer.

Having one “golden goose” customer that provides the majority of your revenue can give you the illusion of security, but if they choose to take their business elsewhere, your business could be left in dire straits.

Since funding applications supported by healthy profits are more likely to be approved, this is the perfect opportunity to apply for and get the influx of working capital you need to increase the number of geese patronizing your business.

With this extra money, you can fine-tune and boost your marketing and promotional materials, extending your reach to capture the attention of other high-spending customers and decreasing your reliance on that single golden goose.

7. You’re running out of space.

Are you running out of room for inventory or your employees? If so, it’s time to look into expanding your space. This can take a few forms:

  • Renovating your existing property to expand or add on to the available space
  • Moving to a new, larger location
  • Expanding to a secondary location in a hot market

Growing your space can be a difficult process, especially if you don’t have enough cash on hand to make a down payment on a contractor or a new facility. Small business funding can help fill these gaps.

8. A short-lived opportunity to grow or capture more business pops up.

Opportunities to grow can be fleeting. Perhaps you have a chance to pitch a big new project and need funds to support your pitch or purchase more inventory, or you find a fantastic deal on a bigger space or an opportunity to take over an existing practice. These opportunities can disappear as quickly as they arrive, and unless you have enough cash on hand, you might lose out.

Funding from alternative lenders like Greenbox Capital can be approved and deposited in as little as one business day, enabling you to seize unexpected or short-lived opportunities to grow.

Wrapping Up

When is the right time to apply for funding? The short answer: when it’s time to grow. Keep an eye out for these signs that you might be ready to apply for small business funding to support your growth:

  1. You have a steady stream of regular customers.
  2. Your customers are asking for products or services you don’t offer.
  3. Your profits are stable and steadily increasing.
  4. Most of your profits come from a single “golden goose” customer.
  5. Your industry is growing.
  6. You have more business than you can handle.
  7. You’re running out of space.
  8. A short-lived opportunity to grow pops up.
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