Who doesn’t use email accounts, social media sites, and websites to reach people worldwide? That’s because busy people depend on technology to get more done. It changes the lives of not only individuals but businesses.
Business owners depend on technology to market their products and services and improve their business operations. They use drones and robots to deliver and make products and network remote servers via cloud computing.
It can be said with certainty that technology helps business owners plan, manage and market what they sell to make a profit.
Technology helps your business succeed.
As you grow your business, you may need to acquire funding. To make sure your business is ready for that next step, a dependable technological tool you should look into is a business loan calculator. It’s your go-to gadget to determine the loan amount, interest rate, and term that’s affordable for your business.
Many financial institutions, like Camino Financial, offer this free-to-use tool
Don’t apply for a loan if you haven’t used a business loan calculator
Let’s look at an example that will help illustrate how business loan calculators help entrepreneurs:
Sally operates a custom tailoring shop in the heart of a thriving metropolis. Because her business location is in a high-traffic area, she has plenty of customers.
Women needing wedding gowns, tourists and downtown workers drop in routinely.
Many of Sally’s clientele are repeat customers. An automated system would help her track specific details about them. Furthermore, she wants to upgrade to high-speed, computerized sewing machines and sergers so she can complete sewing projects quicker.
Of course, all of these changes require extra money above and beyond what she spends for day-to-day operations. She believes that getting a small business loan is the next logical step but she’s uncertain whether she would qualify for financing.
To ease her mind, another business owner friend of hers suggested that she use a business loan calculator. By using the tool, she can figure out a comfortable amount of money to borrow that matches her budget.
Sally didn’t even know the tool existed and discovers that it’s very easy to use. All she needs to do is enter a loan amount and choose a specific term and interest rate. Within seconds, the calculator provided the total loan costs she’d pay.
She can review closing fees, total interest paid, and the monthly payment amount.
What’s also helpful is that she can reset the financial tool and re-enter other loan scenarios to come up with an affordable loan amount.
After using the business loan calculator, Sally decides to borrow $15,000 and repay the loan in 48 months at a 1.75% interest rate. Her closing fee will be $1,048 with total interest amounting to $7,295. She’s also encouraged that the monthly payment of $464 is very manageable.
Because her friend has used a business loan calculator before, he points out that Sally should only get the loan upon meeting these two requirements.
- The monthly payment shouldn’t exceed 80% of the net profit.
- Total loan costs must not exceed the expected total return after making the investment.
Sally’s monthly net profits to operate her tailoring business average $750 so the monthly payment of $464 is within the 80% guideline. By making 48 payments, she will spend $8,343 in costs and realize an estimated return of about $12,650.
It’s clear to her that getting a loan is profitable for her business.
By having faster equipment and a way to keep her customer records up to date, she can take on more work. With the extra funds available, Sally can make these positive changes without dipping into money she normally uses to pay bills.
After applying and being approved for a loan, Sally purchases a CRM (customer relationship management) software.
She also decides to purchase bookkeeping software. Up until now, she has used an accounting service but decides to take care of the books herself.
When Sally first started her business, she wanted to fully concentrate on building her business. However, Sally has always been good with numbers and wants to offer accounting services to existing clients to generate more revenue. By having hands-on experience, she’ll have a better idea of how to proceed with the new business venture.
Sally upgrades her sewing equipment and sells her older equipment to a seamstress just starting out. She puts the money she saved by completing bookkeeping tasks herself and the sale proceeds from selling the old equipment into a savings account. Should cash dip too low, she can use those funds to shore up cash flow and purchase additional assets.
After using the CRM software, clients are bringing in more work and giving her referrals. Many times she has video conferences with potential clients. Additionally, she uses the software to analyze data and create marketing strategies.
Because she purchased faster equipment, Sally increased her workload and raised her prices slightly. Now, Sally intends to add a part-time employee to complete administrative tasks so she can concentrate on growing her business.
Sally is glad she found out about a business loan calculator. She could move forward confidently because the financial tool removed her doubts about whether to get a loan.
A Business Loan Calculator Will Help You Too
Using technology pays off because it helps you tackle business problems.
The calculator eliminates any guesswork associated with getting a loan. You know before you commit to taking out a loan what amount you can afford. Just like Sally, you’re able to review real costs to see what financial arrangement works best for your business.
Like most people, life’s what-ifs are what trip you up. This is one instance where using a business loan calculator provides immediate answers to your questions.
Maybe you’ve been thinking that now is the perfect time to invest in your business. If your business needs an injection of cash, why not use the free financial tool to find out how much you can borrow?
Before stepping inside a bank and meeting a loan officer, you’ll know exactly how much money you can borrow.