photo credit: wili_hybrid
Over the past few years, we have heard many small business owners talk about their need for small business loans. These are loans that they need in order to obtain credit, get out of debt, buy new equipment, new marketing and advertising and more. However, the problem that most small business owners have is not necessarily that they need a loan, it’s more that they need customers to come into their stores and actually spend money.
Whether a small business owner obtains a loan or not, if they still do not have customers buying from them then their money troubles are only going to come back. Without customers spending money there is no revolving profit, no money coming in period which means no money to keep up with the every day tasks of a business, thus needing more and more loans in the future.
Small Biz TrendsÂ recently stated the the true problem for small businesses is not needing a loan, its the fact that they have no customers or fewer customers buying their products and no small business loan is going to correct that problem. With the unemployment levels being at their all time high, capital expenditures at their all time low as well as credit being tightened up for everyone and sales falling to an extreme low, it’s no wonder that small businesses are seeing less traffic in their business.
The problem, the report suggests, is that small businesses need customers and sales more than anything. When they get more customers and/or those customers buy more, small businesses in turn will be able to make capital purchases and do more hiring. But until customers loosen the purse strings, conditions for small businesses will remain challenging.