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Growing Your Business in 2018

As companies continue to plan for 2018, business owners are determining their priorities for the New Year and how to be best positioned for growth. According to a recent survey, small-mid sized business optimism remains near its highest point in a decade as many business owners report plans to invest in their businesses and add jobs. In the survey, 33 percent of small business owners said they plan to increase capital spending over the next 12 months and 32 percent plan to hire employees in the year ahead. Here is some insight on overall market optimism and how business owners can look to grow.

Small business owners who are looking at growing their businesses in 2018 – whether that includes expanding to a new location or hiring more employees – and need access to capital have a range of options to consider. Those options include everything from conventional business term loans offered by banks to financing available through non-bank FinTech lenders. With so many choices available, it’s important for business owners to carefully consider their financing options, look closely at rates and terms and their relationship with the lender, to find the right fit that meets their business needs.

One financing option business owners may want to explore is a Small Business Administration (SBA) loan, which includes SBA 7(a) and SBA 504 loans. SBA loans are extended to small-mid size businesses through banks and other lending institutions participating in SBA lending programs.* The U.S. Small Business Administration does not directly make loans, but provides a guarantee for a portion of each SBA loan made to small businesses by SBA lenders. With the government guaranty, SBA loans are an attractive alternative for many qualifying creditworthy small businesses that may not be able to obtain conventional bank financing. These loans typically allow longer repayment terms, and lower down payments than conventional loans.

So, when might an SBA loan be a good option for a creditworthy small business? From our experience, some of the top reasons business owners pursue an SBA loan is when a business has limited liquidity for a down payment, a shortfall in collateral to secure a loan, or a more highly leveraged balance sheet. SBA loans also are pursued by business owners who want to finance owner-occupied real estate, purchase equipment, expand to a new location or secure working capital.

One way to know if an SBA loan is the right option is to talk to a banker before a lending need arises. A full-service provider of financial services can evaluate financing options, including SBA loan products, and provide guidance to help a business achieve new levels of success.

In an improving economy, creditworthy small businesses have the opportunity to secure a great loan product with excellent terms, and use the financing to help make 2018 the launching pad for future success. QCBN

By David Dinerman

David Dinerman is the senior business relationship manager with Wells Fargo’s Business Banking team in Prescott, Arizona.

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