Choosing the right financing source for your business can be overwhelming. Right? You’re not alone.
As a business owner, you often look for affordable business loans to expand your business, meet cashflow shortfalls, hire new employees, or invest in technology.
If you already own a business and planning to start a new one, this guide by Price Bailey will help you value a business to sell so that you can gain more funds to start your new company.
That’s why we’re here to walk you through the different types of loans and how to choose the one that’s most suited for your business needs.
Benefits Of Business Financing And How It Can Help Your Company Grow
Accelerating Business Expansion
Business owners can realize their growth prospects faster by looking for financing options such as business loans.
For many businesses, expansion may involve opening new branches, adding inventory, or launching a new product line.
Refines Your Marketing Strategy
Any business can leverage technology to launch an effective marketing strategy.
Automated marketing solutions are more cost-effective and have a wider market reach.
To effectively adapt automated marketing solutions, you’ll need to invest in the relevant telecommunication infrastructure and hire experts.
You can reach out to lenders for budgetary support to enable you to elevate your marketing and grow your business.
Sorts Out Cash Flow Challenges
Businesses often run into temporal cash flow shortages thanks to delayed payments from clients or unexpected expenses that may come up in running your business.
You can settle cash flow challenges and meet your obligations when they arise by getting affordable business loans or reaching out for other financing options.
Acquisition Of Updated Machinery
Working with outdated or worn-out equipment can be a safety hazard and make your business ineffective.
Equipment financing loans are an excellent example of business loans that can help you upgrade your office equipment.
Renovation Of Premises
As your business grows, you may want to renovate your premises for more efficient use of space.
A rebranding exercise too may make it necessary to refurbish your premises to reflect the new brand image.
By looking for financing, you can implement a premise upgrade now and pay for it through future installments.
Hiring Talented Employees
Persuading great talent to work for you isn’t easy. You’ll need a screening system to identify and net competent workers in your industry.
Employing competent employees can help grow your network, inject efficiency into your business, and increase productivity.
Hiring talented employees is costly; onboarding costs, additional payroll expenses, and training expenses.
A business that may not afford top talent may look to financiers for help hire experts.
Building Up Your Credit
When you get approved for loans and repay them on schedule, you can enhance your credit score.
With an upgraded credit score, you can potentially access bigger loans to meet greater growth needs in the future.
What’s more, you can negotiate for preferential terms when seeking financing. That will make credit affordable.
The Different Types Of Financing Available To You
Involves raising funds from savings or engaging friends and family for soft loans to start or grow your business.
The main demerit of bootstrapping is that the funds are limited.
Traditional lenders or fintech companies offer business loans to qualifying businesses to start and grow their enterprises.
Affordable business loans may come in various forms;
- Business term loans
- Startup business loans
- Equipment purchase loans
- SBA loans
- Property loans
- Working capital loans
Alternative Business Funding Sources
There are several non-bank financing sources that you can explore as a business to help your company succeed.
Here are alternative financing sources;
- Venture Capital and Angel Investors
- Business Grants from corporates or state agencies
- Online loans from fintech lenders
- Peer-to-peer lending
How To Choose The Right Type Of Business Funding For Your Company
Here’s what you need to consider before you select a type of business funding;
- The amount you need
- Whether you can pay within the required period
- Availability of collateral
- Your credit score
- Your borrowing purpose
How To Apply For Business Financing And What To Expect
- Evaluate the available financing options where you qualify
- Assess your borrowing purpose and match it to the most appropriate loan type
- Get your paperwork ready
- Select a reputable lender
- Acquaint yourself with the borrowing terms
- Follow the lender’s requirements in preparing your application
- Submit your application
- Familiarize yourself with the approval period of the lending institution.
Reach out to a reputable lender today for an affordable business loan to help your company succeed in meeting its growth prospects.