How to Finance Taking Your Startup to the Big Time

You've reached a critical point, and you need financing for your business. Maybe you’re a seasonal business owner who needs funds on hand to get through the slower months. Maybe your product was featured on a major blog, demand skyrocketed, and you need cash to keep pace with orders. Or maybe the heating system in your brick-and-mortar store is on the fritz and you need it fixed to keep shoppers comfortable while they browse. Whatever your reason, there are clear actions to take once you realize you need a small-business loan. 1. Crunch the numbers. You might be tempted to aim for the biggest loan amount possible, thinking it's best to have lots of spare cash on hand. But you must be prudent about selecting the appropriate loan amount. You have to address your business need, but you also need a feasible way to to repay your lender. Settling upon the correct loan amount is easier when you consider your debt-service coverage ratio (DSCR). The DSCR calculation reveals how easy it will be for you to meet your monthly or weekly loan payments, given your average cash flow at present. Keep adjusting the potential loan amount until you find a zone where repayments won't put a financial strain on your company.