Best Business Loans
for Gutter Companies

There are different reasons to take out a loan: to expand, to purchase inventory, or to meet working capital needs. Get clear on why you’re thinking of borrowing before you approach lenders. 

However you plan to use the borrowed capital, borrowing with a clear intent 

Once you know why you need the money, make a budget for your plan. If you need to cover working capital needs, sum together the rent, payroll and utilities you want the loan to cover. If you’re planning to expand into a new product line, how much will you need to invest in supplies? 

When it’s time to apply for a loan, you want to know how much money you’ll need. If you fail to borrow enough, you could trap yourself in a debt cycle of continual borrowing. If you borrowed to fund a larger plan, failing to take out a large enough loan could require loan stacking – taking out multiple forms of credit to fund the plan. 

Both falling into a debt cycle and loan stacking could harm your business’ cash flows. Managing multiple loan payments takes time away from running your business, and the amount you pay in interest could make it harder to get out of debt. Have a firm dollar figure in mind that you want to borrow before applying for a loan.

You’ve identified why you need to borrow, and know how much money you need, but can you afford the loan payment on a loan that size? 

The size of your loan payment depends on the loan’s repayment term, interest rate, and capital. A loan with a shorter repayment term will have larger payments because you have less time over which to spread the repayment. With a higher interest rate, you’ll pay more to borrow.

When you apply for a loan, lenders will give you an estimated payment amount. You can also use an online calculator and plug in the borrowed capital, interest rate, and repayment term to get a rough idea of your payments. Once you have this information, look at your business’ budget.

Can you afford the loan payment? Do your business’ cash flows cover both the payment and normal expenses? If not, consider scaling back your plans and borrowing less.

Traditional lenders such as banks typically get repaid once monthly with a large, lump-sum payment. This repayment schedule might not work with your business’ cash flows. For example, if your customers pay at the end of the month after a completed gutter installation it would be hard to make a loan payment due on the 15th. 

Alternative lenders offer more flexible repayment plans, with daily, weekly, bi-weekly, and monthly payments. The greater customization options allow you to align cash flows with loan payments, making it easier for you to stay on top of your debt obligations.

Small business owners with a lower credit score will find it hard to get bank financing. Traditional lenders and banks prefer to work with individuals who have credit scores of 720 and above. They often have other requirements that can be difficult to meet, too, like time in business and profitability. 

Before applying for a loan, request a free copy of your credit score. Knowing the numerical value that lenders use to evaluate your creditworthiness will guide you to lenders willing to work with you. For example, alternative lenders offer bad credit business loans and other options for borrowers with poor credit. 

If you have a low credit score and high debt balances, expect to pay a higher interest rate. Lenders view your credit score as an expression of risk – the lower your score, the more worried they are that you might default. They compensate for this risk by charging you more money to borrow.