How to position your business for growth this summer

Opinions expressed by Entrepreneur contributors are their own.

The warmer months often bring our quaint visions of small business to the fore – local florists adorn their shops with colorful bouquets, mom and pop ice cream parlours serve door-to-door queues, and our favorite restaurants bustle with the fresh catches of the day and seasonal specialties under a clear sky.

While dreaming of those early summer scenes, it’s important to remain mindful of the economic headwinds that have hurt small businesses over the past year. Although entrepreneurs are used to rising above a tough economy, the challenges persist.

Although inflation rates have come down significantly over the past year, prices continue to cause problems for consumers. Supply chain and labor issues persist, and worries about a possible recession and commodity prices remain front and center for many people.

Despite these concerns, Bank of America’s 2023 Small Business Owners Report found that nearly half of entrepreneurs plan to grow their businesses in the coming year.

Related: 3 Ways to Start Raising Capital for Your Business, Big or Small

The importance of capital

One of the most critical elements for business growth is access to capital. Consistent and convenient credit allows business owners to expand the scale of their operations, diversify their sources of income, acquire new tools and technologies, and provide a buffer against economic downturns.

For many business owners, a key source of capital injection is a bank loan. The process of applying for and obtaining loans can seem complex, even confusing, but understanding the keys to the application and approval process can provide clarity and help business owners set themselves up for success.

Most lenders consider a few key factors when evaluating a loan application: capacity, principal, terms, character and collateral.


Lenders want to be sure that the borrower has the ability to repay their business loan. This is often calculated by evaluating a company’s debt ratio. A capacity assessment is essentially a risk assessment on the part of a lender – they want to make sure you have the cash to make the loan payments.


To obtain a loan, entrepreneurs will likely need to show that they can commit their own funds to cover the costs of the business. Potential lenders are looking for a personal investment in your business endeavors, including equipment and savings to support your business. Think of it as a down payment that shows you’re committed to the project.


Certain external factors are also factored into your loan application, including the economy, industry trends, and any pending legislation related to your business.


Your personal history also plays a role in a credit application. Some character considerations may include industry experience, work history, and personal credit history. Many lenders believe that past behavior is the best predictor for the future, and it is crucial that business owners repay all outstanding loans and monitor the behavior of those closely associated with their business.


Some lenders will want additional asset insurance as security for eventual loan repayment. Inventory, cash, and real estate can all be considered collateral, as can secured loans and credit cards.

Related: 5 Things Entrepreneurs Need to Know When Raising Capital

Other ways to access capital

Sometimes business owners will find it difficult to get approved even if they meet the previously mentioned criteria and are otherwise in good financial health. Fortunately, there are options beyond traditional loans to secure capital, such as grants and community development financial institutions (CDFIs).

There are thousands of federal grants that business owners can apply for, and many state and local organizations also offer grants specific to entrepreneurs. Additionally, CDFIs are lenders whose mission is to provide fair and responsible financing to underserved entrepreneurs.

The small business lending space can seem overwhelming, and keeping up to date with the latest programs and resources available to business owners is crucial — and not always easy.

Many entrepreneurs are interested in more educational resources on small business finance. Over the past few years, these resources have continued to improve and evolve.

The United States Small Business Administration (SBA) offers a learning platform for small business owners, including education and training programs. SCORE also provides educational resources throughout the business lifecycle, much like Bank of America’s Small Business Resources site. Additionally, Bank of America’s Access to Capital Directory can be an essential resource for business owners looking to identify sources of capital.

The capital landscape and approval process can feel overwhelming at times, but by staying prepared, exploring all available options, and keeping up to date with the latest business trends, entrepreneurs can focus less on the ins and outs of finance and more on serving their customers throughout the summer. .

Related: How to Get Funded: The Dos and Don’ts of Raising Capital

Leave a Comment