How Do You Know if Your Small Business is Ready for a Loan?

By Amy Thompson

Oct 03, 2023

10 min read


Your entrepreneurial heart set you on a path to building a small business that thrives. As a small business owner, you’re hard-working, driven, resilient, and don’t mind taking a small risk here or there. None of those things make it any easier to make decisions affecting the business you’ve worked so hard to build. Financial decisions are clearly one of the most important that you’ll need to make at any stage.

Taking on a loan of any type requires thought and planning. You can manage your finances effectively by taking a thoughtful approach to seeking aid. Begin with some in-depth planning of where the money will go, how much is needed, a confident forecast of its value, and how it will be repaid. Although the world of business loans can seem overwhelming, it is not necessary to let your fear of debt stop you from growing your business. A small business loan could provide the financial power your business needs to grow. So how do you know when you’re ready to take on a small business loan?

Don’t wait until you need the loan to apply; prepare ahead. Have a plan and write it out. Make sure you’ve built and maintained your business credit as well as your personal credit— lenders will look at both. Once you clearly understand your business goals and your financial situation, you can determine if you require a loan. It is best to use your loan for strategic investments that will bring you returns and help you achieve long-term success.

With the vast array of types of small businesses, loans are taken for many reasons; CAN Capital put together three of the big ones:


Expanding your business is a great reason to apply for a business loan. For example, growing your products or services may help you attract new customers and increase sales. You should consider getting a loan before expanding to help you prepare your company for future growth and the financial requirements that go with it. Remember, don’t wait. You should seek help as soon as you have established a plan to expand. Repaying your loan will become less of a burden once you have completed your expansion plans and started generating revenue.


Having the right equipment is essential for any small business. Regardless of the scale of the equipment, having the right equipment is essential to the success of your small business. Equipment financing is a great option to get the equipment you need to move your business forward. Equipment financing is different from a standard business loan and is an option that is simple, fast, and loaded with additional benefits. With equipment financing, you can spread out the cost of purchasing new equipment over a longer time period. This will allow you to maintain a strong cash flow while purchasing the equipment necessary to grow your business. CAN Capital has more information on equipment financing, its benefits, and if it’s right for your business here.


Just about every industry has a peak season, and an off-season, businesses can go from extremely busy to a lull throughout the year. Again, planning is essential here. A small business loan could help prepare your business for the busy season with added inventory, staffing, marketing, or other needs. Having the extra cash to invest in your business could help you to respond more effectively to the dramatic rise in demand for your services or products during peak periods. A successful season means you can pay back the loan without worrying about cash flow while improving your business’s financial health.

With a peak season comes an off-season. Securing cash assistance may be beneficial to maintaining a healthy cash flow during periods of low demand. Having the extra funding could help ensure that your business can continue its daily operations even if sales are down.

It’s not as difficult as it seems to decide if the time is right for you to apply for a small business loan. With solid business goals and a clear understanding of your financial situation, you can determine if a loan is right for your business.


CAN Capital has helped many businesses access working capital and equipment financing; we’ve been successfully working with small business owners for over 24 years. If you have questions, we are here to help! You can reach us at or 1-877-500-8282. If you are ready to grow your business now, you can get started online here.


CAN Capital, Inc. makes capital available to businesses through business loans made by WebBank, makes equipment financing available through equipment loans and leases offered by various providers of such products and makes business lines of credit available through providers of that product. © 2016 – 2023 CAN Capital, Inc. All rights reserved.