Business Loans

The Right Time for Online Businesses to Apply for a Business Loan

Every businessman is certainly eager to increase sales of the products and services they provide.

However, this must face various obstacles from time to time. In fact, the current level of sales is considered not able to make the business expand to be more developed.

Increase their business working capital 

There are times when online businesses do have to increase their business working capital coffers so that sales can be realized immediately. However, not all online businessmen have the courage to apply for business loans for one reason or another.

If you experience these three conditions when you want to increase sales, it’s time to apply for a business loan. What are these conditions? 

The decision to apply for a business loan for online businesses is usually relatively the same as other decisions relating to online sales. Cost-benefit analysis can help you to consider the situation.

Generally, there are three situations in which online business loans can be very helpful for online businesses. Like what?

Revenue Growth

As the level of sales grows, you need funds to finance the needs of a larger inventory. Even though you are now a profitable retail businessman, you will definitely need additional funds.

The operational cash flow generated from your business may one day not be able to help finance the growth of your business.

This is a special and typical situation where financing from external sources can help. When your online business finance is included in the ‘healthy’ category and you want to increase it, a business loan is something that is very suitable to meet your needs.

When looking at business activities and sales from a financial perspective, there are three important components to consider:

  1. Inventory, where you have a certain number of products that you keep in stock.
  2. You have managed to sell your product, it’s just that you haven’t received the money from the sale. (This is also common in eCommerce).
  3. Business debt, where you have not paid all costs to suppliers, vendors, business partners, to loans from colleagues.

When you add up inventory and sales results and subtract the available debt, you can find out the total working capital of the business you are funding.

Bridging the Short-Term Liquidity Gap and Fluctuating Income

For every online business, the season where sales increase and the season when sales decline is common. Whatever the category, the term ‘seasonal’ is always a filler to the level of sales.

There are various steps you can prepare to deal with certain ‘seasonal’ effects. You may need to reduce the amount of inventory or sell your product at a discount so that you can prepare other products that are suitable for the season. For example, business products are in line with the Ramadan and Eid seasons.

But often the effects associated with income fluctuations will still cause short-term liquidity gaps. However, you must still be able to generate income. When you are faced with a situation like this, there are usually two choices available to you:

  1. Sell ​​the remaining products in your inventory at a discounted price as mentioned above, or
  2. You can apply for a business loan to cover the gap.

Funding Large Orders and Buying Opportunities

Sometimes things change quickly and sometimes surprisingly. You might find a new business partner that will allow you to provide more products with conditions where you reach a higher sales volume.

Or you might find an opportunity to buy certain products at discount prices of the same quality. For retail businesses, this opportunity is something very important.

Those who act very quickly to market demand will achieve the best results for online stores and their customers. If you and your online store want to grow faster, you certainly need financial flexibility.

Short-term opportunities are the opposite of the liquidity gap. But in financial terms, the two are similar.

You should consider the previous benefits if you don’t have the funds to take advantage of future opportunities. The cost-benefit analysis must also consider loan costs and gross profits.

Well, if the three conditions above you have experienced while running your online business, it’s time you apply for a business loan to boost sales growth of your online business.

Through Good Finance, online businesses that have a strong vision of increasing sales from time to time are entitled to get loans of up to USD 2 billion with low interest ranging from 0.75% to 1.67% per month. Very interesting, right?