The Best Time to Get Funding for Your Business
The best time to get funding for your business is before you need it. That doesn’t mean you need to be frivolous with your business funding. It means you need to be prepared, and you need to understand a few of the realities of business funding.
Reality #1: It’s easier to get funding when you don’t need it.
This sounds counterintuitive, but lenders love to give money to those who don’t really need it. The reason is when you aren’t hurting for money, you have a higher chance of repayment. If you’re strapped for cash, you’re ultimately less likely to pay it back. It’s really just about the lender’s risk.
That’s why, it’s a good idea to get funding while you still have some cash reserves and you’re planning ahead. That doesn’t mean you can’t get funding when you’re in dire needs of funds but showing strong repayment ability generally leads to higher funding amounts and better rates.
Reality #2: Funding takes time.
You might have received emails, calls, or letters from companies telling you they can get you funding in 2 days. This might lead you to believe that all funding can happen that fast, and in some cases it can. But really, the whole process takes a bit longer than that. Most people have a hard time getting together all their financial documents, which are essential to funding. 2 days isn’t the most realistic.
Most funding will take anywhere from two weeks to a month from start to finish. While this process can be much faster if you have all your financial documents in order and you have help from an expert, there are often hiccups along the way that slow the process down. You don’t want a bump in the road to ruin your business, get your funding before you really need it so you’re ready to go when sales are calling.
Reality #3: Whatever you need funding for probably takes longer than you think.
Let’s say you need funding for the holidays, to stock up your inventory, create a great marketing campaign and hire some employees. You might be thinking you can start all this on November 1st and be good to go for Thanksgiving, but you’d be massively behind. You can’t just throw together a marketing campaign. It needs to be appealing and well-timed. You can’t just hire employees and expect them to have all the experience they need to succeed. Allow plenty of time to get the funding you need and make sure you’re working to meet the goals of your company.