What's Your Retirement Plan? Retirement Fund Fundamentals

If you have a small business that you want to grow but you aren't sure if you are willing to risk your savings or your property equity and other investments, a business loan may be the right option for you. Expanding your business with new locations, a larger service area or maybe new equipment can be costly, but often is worth it.

Be sure to have your finances in order when you go to apply for a business loan. There are things that the loan providers will look for, and things you will want to do to make sure that you are still bringing in a profit.

Calculate Your Disposable Income

Look at the amount of money your business has coming in and what you are putting into savings each month. If you have a set amount that you could easily part with, or that you could put towards a business loan without causing strain, this is the amount you want your business loan amount to be each month.

The loan professionals will go through your finances and tell you what they can approve you for, but this is the target amount you want to spend so you aren't strained.

Create a Separate LLC If Possible

If possible, you want to open up the expansion business with an LLC so that the loan will not directly affect the current business that you have. A limited liability corporation has many tax benefits and is a way to keep your businesses separate if needed when you are looking to grow and expand.

Talk with your tax professional or accountant about getting this started. Changing the name slightly or sharing a likeness will work until you are ready to merge the two, and so you can keep saving money with your main company.

Minimize Debts

Minimize debts you have before you apply for the loan so your debt-to-income ratio is low. This may mean paying off some credit cards, car notes or other loans that are showing up on your credit report. Consolidating the debts can also help.

If you want to expand your business, start a second business and start increasing your wealth but are afraid to risk your own saved money, try to get approved for a business loan today. This can be an easy way to get the money you need, without draining your savings as the second business is starting out.