Scaling your business often requires additional resources to reach your goals. If you’re looking to hire more technicians to serve a larger market or purchase new equipment to increase your work efficiency, financing these expenses might be the right solution. While loans may seem risky, you don’t have to put a lot on the line to help fund your business’s next steps.
In this article, we’ll explore a few benefits of how business financing will support your company goals and steps to secure funding with minimal risk.
Ways financing could help your business
You know better than anyone what additional funding could mean for your business. It could mean having extra cash on hand in case the economy slows or having the resources to reach your next revenue milestone. Here are a few tangible ways business financing might help you and your business succeed:
Hiring more employees
A great team is an asset for any business. Not only can it reduce your personal workload, but it also can allow you to expand and serve more people and geographic areas. Hiring and training are expensive, but — when done effectively — are well worth the investment. Taking on financing in order to hire technicians and admins can be especially helpful when you need to hire and train employees fast.
Upgrading your equipment
Could your business benefit from new equipment? Whether you need an upgrade to your tools to increase efficiency or an additional truck to help expand your reach, equipment is often a necessary expense to grow. The returns from investing in new equipment usually surpass the initial investment cost, often very quickly.
Increasing your inventory
“Out of stock” is never something you want to see for materials you need day to day. Waiting on backordered parts can mean jobs are left unfinished or pushed out. Consider being your own supplier by keeping extra inventory of your most used parts and materials. This is a great solution to reduce extra trips to the hardware store and helps avoid project delays if wholesalers and manufacturers are facing supply issues. Buying in bulk also means volume discounts which can bring down job costing in the long term and increase your profit margin.
Marketing your business
Marketing is often the last piece of the puzzle for many home service companies. Excellent service is paramount, and word-of-mouth is irreplaceable, so if you have the capacity to take on more customers it might be time to put some money into your marketing capabilities. This could be as simple as flyers and local billboards, or as robust as hiring a marketing team to optimize your website, create digital advertising campaigns, or add visibility in Yelp or other review sites.
So whether it be to expand your marketing efforts, increase available inventory, hire additional employees, or strengthen your equipment arsenal, using business financing is a smart strategy to address these critical business needs and many others.
What to look for in business financing
Financing for your business should come from an organization you trust, with transparent terms, that serve your interests as a business owner. Here are a few factors to consider when choosing where to get financing:
Vetting your lenders
It’s important to borrow from a company you trust. Before applying for any loans, do your research on the lender’s reputation and the types of loan options they offer. Some of the questions you may want to ask may include:
- Do they offer good customer support?
- What do online reviews say and how are they rated?
- Are they lending to other businesses like yours?
This is a big financial decision where being picky is very important. If you find a lender that has no red flags and suits your needs, you should still compare their loan options and terms with other lenders.
Loan application requirements
Once you’ve decided on a lender, it’s time to apply for the loan. The information you provide in your loan application will help the lender determine if you qualify for the loan amount. Some of the factors they may look at are:
- Your personal and business credit scores
- The annual revenue of your business
- An up-to-date P&L
- How long you’ve been operating your business
- The type and size of your business’ industry
- How you’ll be investing the loan (business plan)
Much like how you’ve vetted them, your lender will be assessing the risks in approving your loan request. Qualifications may vary depending on the lender but it’s important to present the most up to date information about your business like tax documents and profit and loss statements.
Understanding the terms and fees
Congratulations! You’ve been approved for a loan. The end is in sight but the work isn’t over yet. It’s up to you to thoroughly review the terms and fees of the loan agreement and ask any questions that might impact you as the borrower.
Making sure you understand the agreement means no surprises after the loan is processed and repayment period has begun. Some good questions to ask your prospective lender are:
- How quickly do I need to repay the loan?
- Are there any origination or other fees?
- Does the loan come with prepayment penalties?
- What is the interest rate of the loan?
- Will I be required to put up collateral?
- Is there a personal guarantee?
If the answers to these questions aren’t clear or don’t serve your interest as a business owner, it’s best you keep looking until you find the right lender.
Financing solutions that fit your business
Fortunately, you don’t have to look far for financing that fits the needs for your business and doesn’t require complicated paperwork. Housecall Pro and Stripe Capital, an industry-leading financial services platform, have partnered to offer flexible and fast business financing to eligible Pros.
You can join the many businesses that have accepted financing from Stripe Capital and grew their revenue 114% faster than their peers. As a Housecall Pro user, you have access to financing right from your account. You can confirm if you’re eligible by clicking on “My Money” and checking if the Business Financing tab is active in the left-hand menu. Then, make sure to choose the amount you’re comfortable with and apply with only a few clicks — no credit check required.
Within a day or two, you’ll be notified if you are approved. If approved, your funds should hit your bank account within a few business days, ready to be used for whatever your business needs are.
Don’t see a financing offer from Stripe in your account? Criteria for eligibility is based on a number of factors including your payment processing volume and history. So, your best chance to become eligible is to sign up and start taking credit card payments through Housecall Pro. If you are already signed up, consider increasing the payments you process with us. You will be notified as soon as you are eligible, so be on the lookout for an email or check the Business Financing tab in My Money.
How does HCP financing with Stripe Capital work?
You’ll automatically repay the loan through a fixed percentage of each credit card and ACH transaction, so you never have to think about it. When business is good, you repay more. When business is slower, you repay less.
“I don’t even notice repayment, which makes this loan very appealing”
– David, Owner of Trash Buster, San Rafael, CA.
In order to keep you on track, there is a minimum payment required each month or two (look at your application for details). There is no ongoing interest or any other costs, just the flat fee. And you can simply track your repayment progress right in your Housecall Pro account.
If you’re ready to take your business to the next level, consider how financing can help you get there.
Have questions about business financing via Stripe Capital? We have answers here.