Nitin Arora

Summary:  When is the right time to apply for small business loan? There are specific times to check business loan eligibility and apply for loans for specific businesses.

When Should you Actually Apply for Small Business Loans?


Want to apply for small business loan? Before getting into your business loan eligibility and other aspects, you should first consider whether it is the suitable time to apply or not. Sounds confusing? The best time to apply varies from business to business. There are diverse types of businesses as we all know and their needs and intricacies are hugely different from each other. As a result, you should apply only at the right time.

Here are insights on when to apply for small business loan based on your business plan, eligibility and of course, the type of industry you are in.

1. Construction

If you have already executed any major project, you should know by now that the largest projects usually witness execution more in the summer months. This is because the rainy season and winter months hinder productivity to some extent. Colder months are when you will only be able to get work partially done by workers while the rainy season leads to fluctuating and sporadic work. Work peaks for real estate and construction businesses in summer. You should always try and get your projects prior to summer and then apply for small business loan in early spring. In case you require specialized equipment, take a look at equipment funding options.

Plan your funding in a way that your cash flow is kept intact even when productivity goes down and work does not happen for some time. Start your search for loans early in the year.

2. Healthcare-

In this sector, there is not a moment to wait or rest. However, for dentists and doctors, there is a major rush of new patients in the month when summer vacations end since parents aim to get their medical issues addressed before the mad rush starts again. After this peak, business remains stable till it slows down over the festive months. This sudden rush may put you in a bind with regard to hiring temporary staff, updating medical equipment, stocking up on medicines and other inventory and so on. In case you require a working capital loan, you should start early in the first three months of the year to keep yourself covered when the summer vacation begins.

3. Retail-


Retailers usually find that business peaks during peak holiday seasons and more so during the festive period which usually entails the last 2-3 months of the year. Retailers usually witness higher sales and customer demand at these times and usually need more workers, stocks and other preparations beforehand. This necessitates access to working capital. As a result, you should apply for small business loan if you are in this sector around July to August. This will ensure that you get your loan sanctioned and preparations done before shoppers come flying in by droves. Plan in a way that you can always restock your inventory if it is sold out (which is definitely a happy development!).

4. Financial Services

January to April is the season when people in this industry have to contend with back breaking work. The period before the start of the new financial year is the most tedious. You always have to search for business loans for any purpose prior to the tax season. The best time is in November or December. You will thus be able to have some cash in hand for expanding your operations or even hiring more people, whatever be your requirement.

5. Food & Beverages-

Restaurateurs also have to deal with seasonal changes. Business often goes down in the holiday season or sometimes in months with no holidays. There are lean periods for every restaurant along with peak periods where there is huge pressure due to the influx of patrons by the dozens. However, every restaurant has to keep inventory well stocked, pay permanent chefs and other staff and also pay rentals and other maintenance costs all throughout the year. The best time to take a business loan is anytime before the busy summer season starts. This is the window between the end of the festive and holiday season and the commencement of summer.

6. Hospitality-

Hospitality businesses are also accustomed to having peak and off seasons. The best time to get a loan is just before the peak season starts. This will ensure that you have ample working capital to tide you through the pressure of hiring extra staff and keeping everything in order when there is no shortage of customers. Also, it will help you keep cash flow streams running in lean months. The best time to apply for a loan actually depends on where you are based. There are times when customers usually seek you out. These are the times you should identify and operate accordingly.

7. Entertainment & Recreation-

Small businesses in this sector are also subject to seasonal fluctuations. There are peak seasons and holidays that need to be identified. There is always a peak demand season or two which has to be identified. Make sure you apply well before that. This will help you raise capital for being prepared to maximize the peak season and also to generate ample cash to last you through the year if need be. You can also think of applying right after your peak season ends. You can always stay cushioned for the months ahead in this manner. Entertainment businesses should know their peak times and target customers. The ideal time to get a loan would be before any space is readied for the peak season.

8. Fitness & Health –

New Year’s resolutions, festive seasons and vacations, all of these times lead to a huge influx of customers in this business category. Like the other businesses, peak times need to be identified. You should always apply for small business loan accordingly. Try applying before the onset of the cooler months or holiday times when people will be more inclined towards trying out your services.

Always be aware of business eligibility criteria and whether you meet the same or not. Write down your business plan in order to increase your chances of getting the loan sanctioned. The best application times vary from one industry to another. You should always know your industry trends, peak and lull times, when the need for financing arises and so on. If you are seeking short term loans, approvals happen faster while it takes a longer time in case of loans with higher tenures and amounts.

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February 2024