Growing your business will require a lot of hard work, plenty of effort and perseverance but just as importantly, knowledge of funding options. Whether or not you choose small business loans or another type of finance, being aware of their potential benefit can make your business growth path smoother and trouble-free.
How knowledge of funding can grow your business
A 2015 government study looked into ways in which small businesses encountered obstacles to growth. It concluded that growth performance was much stronger in those business that had looked to secure some kind of financial investment as opposed to those that had either not attempted or refused to consider it.
Businesses that turned away from seeking capital investment being unwary or unsure of what seeking external funding entails encountered more resistance to growth opportunities and subsequently experienced slower business growth than those that did not.
So if you want to expand your business, extend your premises, purchase new machinery or assets, fund cash flow, hire new staff or launch a new product then it could be worth seeking out either secured or unsecured business loans to suit your business' cash flow, loan amount and flexibility.
Funding options to grow your business
The growth you are looking for in your business, whether it is seeking more sales, more profit, or just expanding your overall offering, can mean investing more. You can do this by taking one of the following four options:
- returning your profits back into the business
- taking out a loan
- offering shares to investors
- seeking free sources of funding like grants
Three of the above options aren't always available to businesses, either through lack of cash flow, the way it is owned, because it is a startup or because it doesnt qualify for government-funded grants.
But one option is nearly always available to every business: business loans.
Do you qualify for a loan?
Every business can apply for a business loan, whether it is unsecured or secured is up to you.
It doesn't matter if you are a limited company, a sole trader, a corporation or a family business - if you do your homework and prepare your accounts, reports and projections properly you will find a lender willing to offer you a business loan.
Lenders really just want 5 things from an applicant:
Reasonable credit history - the better your credit history is, the more confidence a lender will have in you. If you have poor credit history, be prepared to have strong explanations for why and be seen to be repairing the damage.
A business plan - a strong business plan is usually the starting point for a successful business. It should be flexible, accurate and realistic, taking into account strategy with and without investment.
Verified business history - the impact you have on the business makes a huge difference and this includes your business history and previous performance. Lenders do not want to invest in a business run by someone who continually makes the same mistakes.
Profit and loss statements - you should probably already have these, but make sure they demonstrate the solidity of your current position and how investment will improve it.
Compelling reasons for the loan - what kind of loan do you need and what are you going to do with it? You should be able to answer clearly what you need the money for, how it is going to be used and what the likely returns of this investment are going to be.
Seeking more information on business loans can help in more ways than just financial assistance, it can identify and overcome obstacles to growth that a lack of funding knowledge can be a precursor to.
Always explore your funding options carefully, to find out more about how business loans or out finance packages can help grow you business, give us a call on 03330 069141 to talk through your options or request a call back below.