A profitable business can benefit from receiving a loan. Often the thought is a loan is needed only when profits are down, but increasing access to working capital can be a key factor in increasing a business.
The 2021 small business credit survey showed many small businesses were profitable but faced financial challenges and often used personal capital to bridge the gap. Using a different lender can help increase the chance of getting the funding a business wants and unlock the chance to grow.
Update New equipment:
An important and often hard way to increase productivity and function of a business is to update or acquire new equipment. This can be tough for some businesses as equipment can be very expensive. While a business may be profitable, they may not have the working capital at hand to spend on costly equipment that can depreciate over time.
Equipment on rent can be the solution. Leasing equipment instead of buying it gives business owners flexibility and can help them avoid those large upfront costs often related with new equipment. Because technology is continually developing and improving, a piece of equipment which was top of the line can become outdated within a few years. Leasing equipment helps business owners ensure they have the best equipment for their business, without regularly spending large sums of money every few years or months.
Invest in marketing:
Marketing for a business can frequently be pushed to the side because of costs. A successful marketing campaign needs a solid budget and sometimes outside assistance. Small businesses often neglect this aspect of their business to utilize in other areas of their business. However, marketing is an important part of business growth as a successful marketing campaign can increase sales in a short amount of time.A short term loan can give a business the freedom to invest in these types of ventures. Whether your business needs a website, social media promotion or mailer campaigns – having access to more capital creates a chance for growth through marketing.
Add more products:
Adding one more product to sell or a service provider requires an investment. Increased products/service might need an increase in staff, new equipment or an expansion of the business location. Businesses might know there is a demand for a product/service that they could supply, but aren’t ready to cut into current budgets to add it.New products/services are a great way to increase interest and traffic for a business – Mostly if another business in the area does not provide it. Short-term loans can supply the working capital a business needs to grow what they can provide their customers.
Expand to New Markets:
Adding another location or dividing into a new market can be very costly for a business. The upfront costs alone often stop businesses from expanding. With that said, the profitability of a business can increase significantly from such a move. Investing utilize short-term financing can help a business from cutting into current costs to increase their customer base. For a profitable business, adding debt can appear counter-intuitive. However, there are many ways short-term debt can be the catalyst for increasing overall profitability and expanding a business. The first step when considering financing or a short-term loan is to control how that capital would be used. Knowing how and what the money will be used for sets your business up for success in gain financing and increasing your bottom line.