The Best Time to Get Your Small Business Loan

When is the best time to start looking for extra funding for your business? The easy answer is: whenever you’re expanding, expecting a rush, or covering expenses in a slow season.

But that answer doesn’t quite cover the gamut of all the little decisions that go into taking out a loan. One of the problems with that answer is that it doesn’t account for differences between the various industries small businesses reside in. Here’s how to time your loan search just right:

Healthcare

If you’ve been in the healthcare business for a while, you know that the volume of doctor visits ebbs and flows during the year. In fact, most patients try to squeeze in their visits around the time of the back-to-school rush in August.

More visits means more money, right? Of course – but only if you’re ready. Here are some of the funding options you can use to prepare for the busy season:

• Equipment financing to help you add more equipment or upgrade old machinery
• Accounts receivable financing to cover costs while you wait for receivables to get paid
• Business line of credit to cover additional staffing costs

Whether you’re a doctor, dentist, or therapist, be sure to start your loan search in the winter or spring – long before patients begin knocking down your door in the late summer and early fall.

Retail

As a retailer, you probably see the most sales during the holiday season, in November and December. It’s imperative for you to be ready to survive the marathon of Black Friday, Small Business Saturday, and Cyber Monday.

Getting a loan in spring or summer ensures that you have cash on hand to hire more salespeople, extend business hours, stock up on inventory, or revamp your ecommerce site to maximize sales.

A flexible financing option like a short-term loan or line of credit will help you cover just about any kind of business cost. However you plan to use the funds, chances are you’ll make your money back pretty quickly as the holiday revenue rolls in.

To determine how much financing you should apply for, assess holiday trends for your business the past few years. This should give you an accurate picture of your holiday income and expenditures.

Construction

Summer sun is the sure sign of construction season. After a long winter of inclement weather and interrupted work, summer is the time to dust off your equipment and get back into full swing.

If you start your construction loan application in the early spring, you should have all you need to finance new equipment, hire more workers, or cover upfront costs for big jobs long before the summer rush hits. 

Securing your financing earlier in the year can also provide you with extra cash to cover expenses during the winter lull. And if you haven’t planned ahead? Opt for a business line of credit or short-term loan, both of which are often funded faster than other loan options. 

Restaurant

Despite the fact that we equate the holiday season with an influx of customers, seasoned restaurateurs know that the restaurant industry often suffers from seasonal holiday lulls. 61% of restaurants notice a decline in business during a seasonal holiday or major event. This results in 20% fewer patrons – who are all enjoying home-cooked meals instead of frequenting your establishment.

The problem, of course, is that your expenses don’t slow down just because your reservation list does. You still need to stock the kitchen, pay cooks and servers, and take care of the rent.

That’s why the best time to search for restaurant loans is in the fall. You’ll still have a little surplus cash from the busy summer season and you’ll have the time you need to consider loan options. 

Not sure what you need? You could use equipment financing to get new kitchen appliances or a commercial mortgage to renovate or expand your restaurant.

If You Need Financing Now, Don’t Hesitate

While the times explained above are standard industry financing periods, that doesn’t mean you’re limited to just those instances. The truth is, every business ebbs and flows in its own ways. If your business is taking off and you need cash now, don’t hesitate to take out a loan. Some options are funded in as little as 24 hours after approval – which means you may not have to wait long at all to get the capital boost you need.