How SBA Lending Can Take Your Business from Surviving to Thriving

Written by: Alerus Financial

After two years of improvisation and unexpected challenges, many businesses are ready to look forward. Whether applying lessons learned or seizing new opportunities, owners are seeking capital to help them start their next chapters. For many small businesses, a loan from the U.S. Small Business Administration (SBA) may help them make the shift from “surviving” to “thriving.”

As you consider ways you can improve and grow your business, be sure to connect early with a preferred SBA lender. They know the particulars of SBA lending and have experience working with businesses like yours. Here are five questions to ask yourself and your SBA lender:

Is an SBA loan right for my business?

The SBA managed emergency loans and grants during the COVID pandemic, but its bread and butter is lending programs designed to level the playing field for small businesses. They often don’t have major physical assets for collateral, so SBA loans focus more on cash flow when evaluating a loan application. And they often have longer repayment terms compared to commercial loans, so more cash stays in the business month-to-month to support operations.

Can I add automation to help endure the tight labor market?

What investments will help your business thrive? For many businesses, attracting and retaining labor is both a challenge and a significant cost. It can be the bottleneck that holds back growth. An investment in automation may help your business do more with fewer employees, so you can focus on retaining your best workers and still have the capacity to serve and grow. Automation can range from manufacturing machines to online payment processing capabilities.

Does my business model need retooling post-COVID?

Some organizations had to go lean to survive the pandemic, while others saw business reach new heights. In both cases, there may be opportunities to rethink business from the ground up. Do you want to shift from sit-down dining to food trucks or delivery? Has demand for a product skyrocketed, requiring a new or shifted factory line? Now could be the time to get ahead of future demand. SBA term loans can help finance these kinds of capital investments.

Can I change my inventory approach to beat logistics crunches?

Another mind shift following the pandemic is that businesses need to balance the efficiency of a just-in-time supply chain with the certainty of on-hand inventory. SBA lines of credit can help small businesses build up and maintain a larger inventory of necessary goods and materials, which will require adjusting what normal cash flow and balance sheets will look like.

Have I accounted for all the expenses of my improvements?

Never forget to think around every corner when investing in your business. New equipment, new employees, and new products also have associated costs, some short-term and some ongoing. Make sure you factor in things like training workers on new equipment, bringing on new salespeople, leasing storage for more inventory, or other related costs. An experienced SBA lender has seen it all and can help you think through this.

Thriving as a small business takes more than just capital. It takes a good plan and excellent execution, and that means having a reliable, experienced team on your side. Alerus is an SBA-preferred lender with a dedicated SBA team that can both guide you through the loan process and help you think through your strategy, drawing on other Alerus resources to fill the gaps. Contact us today and get ready for what’s next.

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