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A small business cannot grow without proper budgeting, which is one of the most annoying and, unsurprisingly, most frequently neglected responsibilities of business owners. But you must know where you stand from a financial standpoint in order to avoid unforeseen pitfalls and pursue lucrative opportunities. Should one such opportunity could involve, say, a small business loan, being nearly 100% about your business’s financial health will eliminate nearly 100% of the stress that comes with paying back debt while carrying out a crucial investment.

The main reason budgeting is perceived as such a headache is because it is not hard to incorrectly assess how much money your business is making, how much money you will spend in the not-so-distant future, and how much money is actually at your disposal at the present moment.

Here’s a few very common mistakes that could cause you to arrive at these incorrect assessments:


For some small businesses, a profitable month on paper doesn’t directly convert to strong cash flow. This problem stems from an extended business cycle, or the time between a sale and being paid in full. Profits can easily get tied up in receivables that can take several months to collect. If this is the case, are your profits really profits at all? The longer you let an account go unpaid, the more it whittles away on profit margins, especially if you spend a portion of this time trying to collect the money instead of handling your usual day-to-day tasks.

There are two actions you can take to eliminate the risk of mistaking profit for cash flow. First, you can compile a four-column accounts receivable aging report that separates the due dates of receivables in 30-day columns. This will clarify the timing of your collections as well as how much cash you’ll have available by certain important dates.

The next step is to consider accounts receivable factoring from an alternative business financing company like United Capital Source. Small businesses need to evolve in order to stay competitive, and this is extremely difficult to do without a steady, predictable stream of funding and the ability to work with whatever clients you choose or those that choose you. With accounts receivable factoring, you can extend trade credit to new clients and improve cash flow by being able to pay your expenses ahead of time, benefiting your bottom line and earning discounts in the process.


One of the largest expenses for most small businesses is the cost of labor. It’s right up there with the cost of goods’ sold. This should theoretically prevent business owners from making hasty hiring decisions but many of them still do not consider the long and short term ramifications employees have on their financial standing. Every employee is either increasing or decreasing your company’s value. Hiring the wrong people purely to fill empty positions could be compared to releasing unsatisfactory products or services. Doing this just once is all it takes to sink a business.

The solution to this risk is having more time and money to spend on new hires. United Capital Source specializes in supplying both tools to businesses looking for employees who possess the kind of attitude that is capable of significantly increasing their revenue stream by making tremendous contributions to the company as a whole.

Business lines of credit and credit card processing loans are just two unsecured business loans our clients use to prevent the search and training processes from impeding their ability to cover other business expenses, especially when sales are down.


You can’t be sure about your budget calculations without incorporating how your business will perform in the foreseeable future. This generally refers to any changes or events that will effect how much money you make or have on hand for large swaths of time. Examples include new releases, inflation forecasts, changes in staff, contractual changes, new equipment, or potential increases in rent or facilities.

This is the level of planning that must ensue in order to obtain the right terms and borrowing amount for a small business loan. You’ll have less surprises to worry about as you make payments, and your business lender will structure your loan to offset the effect these changes have on operational funding month-to-month. The more you know about what’s coming, the more your business lender will trust you to use your funding wisely.


With all the time and energy that goes into establishing an accurate budget, it’s tempting to comfort yourself by thinking you only have to do it once or maybe twice a year. This might be true if you don’t want your business to evolve, or in any case, survive. Successful businesses budget and track their costs, revenues, and any issues related to income on a constant basis. Never done that before? There’s no better time to start than your first small business loan with United Capital Source.

From the moment your application for funding is approved, we will be at your side to help you figure out how much money you will need for each upcoming stage of your career. Any questions you have can be answered with a single phone call or email, as we never make our clients wait for important information. Once you learn how to budget for debt financing, you’ll become even more qualified to handle additional rounds of funding when you are ready to grow again.

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