How to make the most of your business loan

Focus on your key priorities and use your newly acquired funds where they’ll have the greatest impact.

Now that your long-awaited loan for your business has been approved, is the fresh influx of cash burning a hole in your pocket? It’s tempting to start writing checks, but keep a cool head. You need to know how far your loan will take you and for what purpose.

Follow these basic budgeting dos and don’ts to make the most of your business loan.


Dos of business budgeting

  • Build your budget: Clearly articulate your operating costs for inventory, leases, payroll, marketing, supplies, licenses and registrations, equipment and supplies. Know what it will take to be profitable. Many businesses don’t turn a profit in the first few months or even in the first few years. Understand how far your loan will take you — and how you’ll use it to eventually turn a profit. 
  • Document your deals: It’s easy for two parties to misunderstand the spirit of a verbal agreement. Make sure all agreements pertaining to your business are in writing. A good rule of thumb: If a contract will last longer than one year or has a value of more than $500, it should be in writing. This will eliminate unpleasant surprises and prevent you from spending any of your hard-won business loan money on avoidable attorney costs. 
  • Hire the right people: You can’t afford to have avoidable personnel issues. Not only is it important for you to be able to trust your employees to help you succeed, but you need to feel confident that they’ll serve customers according to your exacting standards. Take the time to hire carefully. 
  • Seek advice and input: Mentors and advisors, along with classes, workshops, books and articles, can provide valuable assistance in navigating uncharted waters. However, don’t let them cause you to lose sight of your end game. Listen attentively but also trust your instincts. 
  • Obtain required licenses and permits: You can’t turn a profit if you’re shut down for a permit violation. Familiarize yourself with any city, county or state inspections that may be required and any other regulatory requirements. Get the licenses and permits you need.


Don’ts of business budgeting

  • Don’t take on needless debt: There’s never a good time to take on unneeded expenses. For example, if you’ve been running your business out of the garage, it’s tempting to use your cash infusion to rent office space at the most upmarket address in town. In reality, any reputable location will be a big step up from bunking with the family cruiser. Prioritize your needs to make the most of your loan. 
  • Don’t rest on your laurels: You may have a killer business concept right now, but it’s important to look for ways to hone products and services. It’s also advisable to be on alert for expansion opportunities and logical extensions of your existing product line. Keep that entrepreneurial mindset. 
  • Don’t try to do it all: Although it’s important to know all the facets of your business, you don’t have to do all of the work yourself. Identify the areas where your contributions will have the most impact and look for ways to streamline, eliminate, delegate or outsource other responsibilities for the sake of your long-term success. 
  • Don’t neglect your finances: Pay attention to administrative details. A business budget needs constant attention. Keep accurate and timely records of your accounts payable and receivable, as well as sales, profit margins, expenses and other key financial metrics. Be sure you’re clear about what taxes you need to pay and make sure you pay on time to avoid IRS penalties. 
  • Don’t neglect customer service: You can have the best product on the market, but if you frustrate or alienate your customers, you won’t be in business for long. Stellar service can cement relationships and build loyalty that keeps customers coming back.

By focusing on these simple tips, you’ll be able to concentrate your efforts on your business priorities and be well on your way to even more success.


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Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, Home Equity and Credit products are offered through U.S. Bank National Association. Deposit products are offered through U.S. Bank National Association. Member FDIC.