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Funds to Build Your Business

07/20/2020 - Growing Your Business, Responsibly Borrowing & Managing Credit

Business-owning couple with excited smiles holding a sign that says We're Open Business-owning couple with excited smiles holding a sign that says We're Open

Growing a business requires a steady flow of money.

Building a business costs money—usually more than you can generate from your operating revenues.

Whether you’re adding a new truck to your fleet, building a new housing development, or creating software, you’ll need money to turn these plans into reality. It might help to work with an accountant to calculate estimated costs for reaching the next level of development.

The Basics

Before you borrow, list your basic business expenses. Each time you expand your business, these costs are likely to increase:

  • Employee salaries
  • Rent
  • Electricity, heating, air conditioning, and fuel
  • Paper and other office supplies
  • Purchasing or leasing operating equipment
  • Decorating or remodeling costs
  • Legal and professional fees
  • Insurance
  • Taxes
  • Machinery and power tools

Bank Loans 101

If you’ve made the decision to borrow money for your business, which loan is right for you?

One business loan option is a line of credit, which gives you short-term or seasonal funds. A line of credit is very similar to a credit card, with the notable exception that interest on a line of credit is lower and may be tax deductible. You borrow cash, using your business assets as collateral, and pay back the principal and interest on any outstanding balance each month.

A long-term credit loan usually lasts up to five years, and is helpful if you want to have money for operating costs until your business turns a profit. Banks typically require that you provide collateral or sign a promissory note on this type of loan, and pay it back in installments.

Credit Cards

Visa, American Express, and Mastercard all offer credit cards aimed specifically at small businesses. These cards offer lower interest rates than normal credit cards, and often have higher credit limits.

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Your First SBA Loan
See if an SBA loan could be right for your business.
  1. Figure out how much you need to borrow for your business.
  2. Learn how SBA Loans work.
  3. Get ready to apply for an SBA Loan through your financial institution.

Do You Qualify?

If you’re thinking about taking a loan to build your business, there are several qualifications that banks and investors normally expect from you, as the owner, and your business. Before you apply for a loan, make sure that you can provide potential lenders with the following:

  • Business plan
  • Balance sheet and income statement
  • Cash flow projections
  • Profit and loss reports
  • Personal financial statements for all business partners
  • Credit report
  • Personal income tax returns
  • Information on business debts

Getting the Loan

WesBanco is dedicated to growing the interests of small businesses in our regions. We have a variety of small business loans to support your borrowing need, whether you’re a small, midsize or growing commercial business.

We work to get to know you and your business, so we can recommend the right products when you need them. Even if you’re not ready to borrow yet, you can open a business checking account or savings account to develop a working relationship with our team before you apply.

In addition to getting to know the financials of your business, we may ask how much you have personally invested in your company, as a way to assess your commitment to the business and risk of investment. Having personal financial information handy can help drive conversations with our business lending team.

A Little Help

Since 1993, the Small Business Administration (SBA) has extended Microloans to businesses to help finance machinery, office space leases, equipment, and other basic necessities.

The most you can borrow with a Microloan is $50,000, and the average amount that borrowers use is about $13,000. Although the term of the loan depends on what you’re using the funds for, and the size of the loan, the longest term for a Microloan is six years.

The SBA can also help you create a loan package and secure funds through a program called Lender Match. You can qualify for the loan if your business qualifies based on SBA standards.

For more information, go to SBA.gov.

Explore Business Lending Options

Content is for informational purposes only and is not intended to provide legal or financial advice. The views and opinions expressed do not necessarily represent the views and opinions of WesBanco.
While we hope you find this content useful, it is only intended to serve as a starting point. Your next step is to speak with a qualified, licensed professional who can provide advice tailored to your individual circumstances. Nothing in this article, nor in any associated resources, should be construed as financial or legal advice. Furthermore, while we have made good faith efforts to ensure that the information presented was correct as of the date the content was prepared, we are unable to guarantee that it remains accurate today.

Neither Banzai nor its sponsoring partners make any warranties or representations as to the accuracy, applicability, completeness, or suitability for any particular purpose of the information contained herein. Banzai and its sponsoring partners expressly disclaim any liability arising from the use or misuse of these materials and, by visiting this site, you agree to release Banzai and its sponsoring partners from any such liability. Do not rely upon the information provided in this content when making decisions regarding financial or legal matters without first consulting with a qualified, licensed professional.

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