Have a small business and need some extra funding? It’s understandable: running a business costs a considerable amount of money! Additionally, people understand that sometimes it takes a little while for a smaller business to really get off the ground, especially in its first few years. If you’re thinking about getting small business lending but are wary about approaching a bank, there are other alternatives to get a loan. One place you could look is directly with the U.S. Small Business Administration. They have a tool on their website under “Loans and Grants Search” that can help you locate available loans and grants for small business lending purposes. Not all may be from a bank, but from the private sector as well.
Why Is It Important To Fund Small Businesses?
You may be surprised by these numbers, but did you know that there are between 25 to 27 million small businesses operating in the United States currently? Funding experts estimate that these small businesses are responsible for anywhere between 55 and 80% of all jobs held and contribute over 50% of all sales in the United States. They’re also helping fund other businesses — small businesses take up between 30-50% of commercial space in the United States. That’s anywhere from 20 to 34 billion square feet!
Small businesses require entrepreneurship, innovation, and forward thinking individuals. These are all values America prides itself on and part of the reason it considers itself a great nation. Why wouldn’t we want to further and reward these talents by helping them get off the ground and stay in business? Additionally, small businesses provide more jobs for more people — they reduce our unemployment rate, provide people with fresh starts and new opportunities, and a sense of purpose. Small business loans are an important way many of these small businesses are able to be in business in the first place and how they stay in business as they grow a customer base and support.
What Are Some Of The Costs of Running A Small Business?
Although many small business owners account for long term expenses or immediate upfront costs when looking into small business lending, there are hidden costs and expenses that simply come up. The day to day cost of running a business can be incredibly steep. For example, in 2014, over half of small businesses dished out money to either buy new equipment to cover the old equipment that didn’t work or on keeping their IT infrastructure up to date and running efficiently.
Three of the more basic costs that small businesses constantly face are maintaining employee wages, conducting inventory, and paying rent. Paying employees (and paying for benefits) can be almost 20% of a business’s budget, while conducting inventory accounts for almost 8% and paying rent is almost 5%. Getting working capital loans — and specifically working capital loans for small businesses — can go a long way towards helping pay this type of thing off while your business gets on its feet.
Sometimes the truest test of a small business is simply being able to stay in business. Make sure your business gets the chance it deserves and look into small business lending.