Bank Term Loan - Use of Funds
A Bank Term loan from a bank in the SmartBiz Loans network can be used in a variety of ways to build your business and save money. The financial professionals at SmartBiz Loans are available to answer any questions you may have regarding acceptable uses of loan proceeds. The following are popular ways our customers use funds.
Working capital is used to cover a company's short-term expenses like inventory, equipment, marketing, payroll, hiring, and payments on short-term debt. The formula to calculate working capital is: Deduct current liabilities (primarily short term loans due within a year and accounts payable) from current assets (cash on-hand and things that can be easily converted into cash, like inventory and accounts receivable). If your current assets don't exceed your current liabilities, a bank term loan can get you back on track to help meet ﬁnancial obligations and cover day-to-day business expenses.
Many entrepreneurs rely on expensive debt when launching or in the early stages of their business. If those debt obligations are cutting into cash flow, refinancing can help you save big. For example, a marketing consulting company in San Francisco was making excessive monthly loan payments. The owner took out a $100,000 Bank Term loan with better terms and lower rates from a bank in the SmartBiz network. He was able to refinance three high cost loans, saving the business approximately $7,000 monthly.
A bank term loan can cover costs related to hiring like recruitment, training, salary, and beneﬁts. An automotive business in North Carolina needed additional workers to keep up with service demand. The business owner allocated $15,000 from a bank term loan to hire and train 2 new technicians. With the additional staffing, he'll be able to take on more jobs, increasing revenue.
Business equipment includes tangible property (other than land or buildings) used for operations. Examples include computers, machines, tools, and vehicles. A frozen food wholesaler allocated $60,000 from a Bank Term loan to replace outdated refrigerated equipment. The business now has reliable cold storage to handle current and future inventory.
A bank term loan can finance marketing efforts to build your brand, attract customers, and increase sales. Consider a Bank Term loan from a bank in the SmartBiz network to cover things like advertising, trade show costs, promotional materials, and more. For example, an established beauty salon is using $10,000 from a bank term loan to revamp their website, invest in Google pay per click ads, and launch social media campaigns.
If you need to increase existing inventory or expand your product line, funds from a bank term loan can cover the costs. The owner of a cafe in California is using loan proceeds to purchase additional coffee and tea products. They'll save big by buying goods in bulk.
If you need funds for remodeling, bathroom updates, or other space improvements, consider a Bank Term loan from a bank in the SmartBiz Loans network. A restaurant located in Atlanta came to SmartBiz to solve a problem. Demand for their food was high, but their available dining space was too small. The business owner took out a Bank Term loan to expand into a space next door. The funds are being used to hire a contractor/engineer along with a designer to handle aesthetics. The projected additional revenue per day due to the larger space is $1,000- $1,500 per day.
A buyout is where one party purchases shares of a business to acquire a controlling interest in that company. Funds from a Bank Term loan from a bank in the SmartBiz network can finance this type of transaction.
Funds from a bank in the SmartBiz network can be used to purchase an additional business. However, funds cannot be used for a new business purchase. If you have questions, please ask your SmartBiz Loans relationship manager for specifics.
Frequently asked questions
What's the difference between a SBA loan and a bank term loan?
How much can I borrow?
Will checking my rates affect my credit score?
How quickly will I receive my funds?
Are there fees or other costs involved?
SmartBiz Loans helps you get to a “yes” by preparing and presenting your unique business history to the multiple banks in our lending network. For its services, SmartBiz Loans charges referral and packaging fees. Bank closing fees and additional third-party report charges may also apply. For complete and transparent fee and cost information for all of our products, see our complete FAQs. For questions, please call us at (888) 555-1234.
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1. We conduct a soft credit pull that will not affect your credit score. However, in processing your loan application, the lenders with whom we work will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and happens after your application is in the funding process and matched with a lender who is likely to fund your loan.