When your small business customers are planning a growth phase, or an expansion project, or are looking to increase their capacity, a bank loan will be the first solution that pops into their heads in terms of funding. But it’s not always the best solution, depending on a) what they want the money for and b) their ability to service a loan.
If they come to you with an application and you think you’ll have to turn it down, soften the blow by suggesting to them other ways they can raise money. There are any number of options and all it takes is a bit of creative thinking. They could extend their overdraft, or make better use of their credit cards. They could review all their costs and look at ways they can reduce them, such as using Skype for meetings instead of expensive travel.
They could consider equity on personal property, or approaching friends and family for an investment. They could reduce their own salary, and sell off any un-used assets, leasing them back when needed.
The below article is a good one to share with your small business customers – it will help them decide if they really need that loan after all.
Read the full article at: www.allbusiness.com