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How to Pay Back a Loan If You’re Having a Slow Season

According to the US Small Business Association, there are 28.8 million small businesses in the US, and they have 56.8 million employees. Businesses are defined as small if they have fewer than 500 employees. In the US, small businesses account for 99.7% of all businesses.

The NSBA (National Small Business Association) conducted a survey among small businesses and found out that 27% of them weren’t able to receive the funding they needed. According to the SBA, business loans, credit cards, and lines of credit represent nearly ¾ of financing for new firms.

Based on Biz2Credit’s Small Business Lending Index, in March 2016, major banks approved 23% of funding requests, institutional lenders approved 62.8%, small banks approved 48.7%, alternative lenders approved 60.7%, and credit unions approved 42% of loan applications.

If you have a loan, you might be interested in how you could pay it back during slow seasons. Regardless of the size of the loan, this is a serious problem that you should tackle taking the right steps. So, what can you do?

  1. Have Your Own Budget

Consider using budgeting or spreadsheet software to keep under control your upcoming cash flows. You should know how much money is flowing into and out of your business. This will help you minimize your expenses and increase profits.

  1. Cut Your Cash Outflows

Look for ways how you can cut your expenses. Speak to your suppliers to see whether you can extend terms. Also, postpone purchases that aren’t critical, or consider reducing the number of working hours. However, this doesn’t refer to payments to be made to a lender or the IRS. Don’t fail to make these payments.

  1. Try Quick Payments

When your commercial customers have some due payments to make, you can negotiate with them and offer discounts for a quick payment. You can try liquidating unnecessary equipment. Another tactic is wholesale your inventory through an auction. Also, you can try working extra hours to increase revenue.

  1. Consider a Merchant Cash Advance

Turn to a reputable business loan provider for a merchant cash advance. First American Merchant, an award-winning alternative online lender and a high risk payment processor, can be the best option to try. FAM offers exceptional business funding opportunities, including small business cash advance bad credit, to merchants of any type. The rates are among the most competitive in the industry.

  1. Try Resetting Your Loan Terms

If you have difficulty paying back your loan, speak to your lender and see whether you can reset your loan terms. Maybe you can extend the length of the loan, pay smaller amounts more frequently, or change the payment date, taking into account your collections date.

As you see, there are a number of steps you can take to overcome the challenges associated with paying back your loan during slow seasons. Remember that one of the best ways to solve this problem is to identify and establish a relationship with a reputable lender that offers business loans and merchant cash advances with the best possible terms and rates.