Getting the news that you’ve qualified for a loan to start or grow your business is both exciting and nerve-wracking. Knowing where to start and what to do with it can feel overwhelming. Here’s what we recommend doing before you receive the loan or as soon as you do:
Have a clear understanding of the terms of your loan
Step 1 is making sure that you clearly understand what the terms of your loan are, and what your repayment plan is. These are important because some loans can only be used for certain things, plus it’s essential to follow the terms of your loan.
For example, AWE Loans can be used for market-ready start-ups, business expansion projects, and business purchases. Loans can be used for a variety of expenses, including:
Leasehold improvements
Equipment purchases
Operating capital
Advertising and marketing costs
Purchase of inventory
Loans cannot be used for:
Owner’s salary
Re-financing existing debt
Franchise fees
Speculative ventures (e.g. Purchase of land for resale)
Intangible goodwill (i.e. business name or reputation)
Research and development
Purchase of stocks, shares, or other non-productive investment
Review your repayment plan and make a budget
The next thing you should do when you receive your business loan is to make a budget based on your repayment plan. All loans come with repayment plans, which should be discussed when applying for the loan and going through the application process. Now that you have the money, you should sit down and make a budget based on what you plan on spending and the terms of your repayment plan.
Prioritize what you got the loan for
Refer back to your strategic/marketing plan - what was your plan for this money? It’s important to stay the course as much as possible and utilize this loan money for its intended purposes. We know that things can come up along the way and plans can change, but the more you’re able to follow that initial strategic plan you created and spend your loan money on those things, the easier it will be to stay on track with repaying the loan. Holding yourself accountable can be difficult. If you don’t have a business partner to hold you accountable, consider speaking with a mentor, confidant or one of AWE’s Business Advisors.
Once you are familiar with your terms and repayment plan, have a budget mapped out and know where you’re going to be prioritizing spending the loan money, you can start spending it! This can feel daunting at first, but with a well laid-out plan and lots of thought having gone into this whole process, you shouldn’t worry about taking this next exciting step to grow your business.
For more information on AWE’s Loan programs, click here.
