The point of a business term loan: to help you finance something big for your business.
Whether you need to make a specific equipment or inventory purchase, want more working capital, need to refinance other business debts, are looking to meet tax or payroll obligations, or something else entirely, a small business term loan can help you out.
And as it turns out, there are few loan use restrictions, if any—though, generally speaking, it’s best practice to spend that money creating more revenue for your business.
Since borrowing isn’t free, you want to come out of a loan with more money than you began with. It’s all in the planning ahead.
If used the right way, traditional term loans can help you push your business to the next level—introducing new equipment, locations, products, or marketing campaigns into your toolbox.
Plus, remember that a business term loan is predictable.
You should be able to figure out whether a term loan will help or hurt your business from the get-go. Just understand the calculations beforehand and plan the coming months or years of spending carefully.