After careful consideration, you’ve finally decided to jump into the business world and use your web design skills to start a web design agency. Congratulations on taking the leap!

Or perhaps you’re already an established agency, and you’re looking for ways to grow your web design business financially.

Google results will probably tell you to take a business loan to help you fund your agency without hassle. But will a loan really help you kick your business to a good start? After all, running your business with debt may not sound appealing.

Stick around as we take a look into the question, “Should I take a business loan for my web design agency?” We’ll discuss factors and questions to consider before taking a loan, and why borrowing money is worth it for your web design agency.

Should you take a business loan for your web design agency?

That depends. First, have a solid idea of how you want to grow your agency to help you decide if you really need a loan, and how much should you borrow.

Ask yourself these questions:

• Will you be launching your daily operations in an office, or will you be doing things remotely?
• What hardware, software, and tools will your agency need for the startup? If you’re already operating, do you need more equipment for your operations? Which equipment would you need to upgrade or replace?
• How many staff are you looking to have for your agency?
• What miscellaneous investments should you venture on to make your agency thrive in the industry?
• How will you find more clients for your agency? Would it be through freelancing platforms or inbound inquiries? If it’s the latter, will you stick with free organic marketing strategies, or will you venture into paid marketing tactics, like Google ads?

This process helps you identify which investments are crucial to your current standing, and which you can put on hold until an expansion is deemed necessary. You can then organize investments and budget your current funds accordingly.

Afterward, if you find your funds short to cover everything, just then should you consider taking a loan.

In reality, taking a business loan is a risky move. That’s why when taking a business loan, the rule of thumb is “borrow only what you can repay.” Overborrowing will see your web design agency closing, just when things are starting to fall into place.

When is it a good idea to take a business loan?

As cliché as it may sound, only have the confidence to borrow money from banks and lenders if you’re 100% sure you can repay it. The faster you can repay, the better.

You can tell this by evaluating the future of your agency. These are the questions you should be asking yourself:

• Are you confident that you have enough clients to earn your agency your perceived earnings?
• Do you perceive any challenges coming your way in terms of operations and finance, and if so, do you find it manageable with your current resources?
• In case you’ll be asked for a collateral for the loan, do you have any valuable assets you’re willing to let go that would be enough to credit you the amount you’re planning to loan? (This is applicable if you’re taking a loan from a bank. If you borrow from credited lenders like Cash Mart, you don’t need to worry about collaterals or guarantors!)
• Can your forecasted earnings manage the interest rate and still have room for future necessary investments?

If you answer yes (with no buts), then relax, take a loan, and watch your initial investment bloom!

Why is taking a loan good for my agency?

Taking loans from banks or credible lenders allows you full control of your business, unlike borrowing from capitalists or angel investors who require part ownership and profits of your business in exchange for the money you need. Banks may require collateral, but those are other assets you earn, not your business.

Also, if you take a short-term loan frequently, it can help you build your credit score and allow you to take bigger loans in the future. This is extremely helpful if you’re looking to expand your business in terms of location, staff number, hardware or software, or area of reach.

Banks and lenders are currently offering lower interests, so if you want to take advantage of that to enjoy doubled ROI for your agency, now’s the best time to take out a loan!