There are many reasons for needing to finance your business, with the primary goal to help develop and grow your venture. If you’re a start-up, it will give you the cash boost to start your journey, and if you are a more established company, it can help with continued business development. Once you have secured funding, what will you use the funds for? Here are 6 ways to use your business loan:
- To Avoid Using Personal Finance
One of the most difficult aspects of starting a business is transitioning from using your own investment into business finances. Many entrepreneurs will use their own savings and earnings to put back into their business idea, leading to a strain on their personal finances. The issue with this is it can cause problems with your credit rating, and you can easily build up debt. Personal circumstances mean unexpected expenses can always crop up, and there are loans for bad credit to help in this situation. Securing business finance can help ease the burden on your personal finances and keep both separate as your business continues to develop.
- Invest in Equipment
Your new cash injection can be useful for bringing in essential new equipment or upgrading current hardware. As a start-up, you can start to build a new office with computers and accessories, bring in office furniture and other essentials you’ll need. This also goes for a remote workforce too as you can provide your staff with more up to date hardware if old equipment is running slow. Whatever it is you decide, it should always be the essentials first and the nice to haves second.
- Bring in More Staff
With more money, you can begin investing in more staff and start to build your business. For start-ups, this could mean bringing in your first employees to begin your journey. For more established businesses, this can involve bringing in essential roles that need to be filled or new ones to be created for growth. Having the extra resources means more flexibility to bring in the staff you need for the day-to-day running of the business.
- Ensure You Are Ready for Busy Periods
If you have a business that relies on seasonal efforts, a business loan can help to plan ahead and ensure you have everything you need. If this involves extra staff, or a larger inventory to meet demand, the extra cash can be well used here. As you may have leaner months with a seasonal business, a business loan can help keep things together during this time and get stock ready in time for a successful quarter.
- Invest in Marketing Efforts
Some businesses may take the opportunity to boost their brand exposure and increase their marketing budget. This can help not only get your company name out there to a wider market, but also bring in more interest from investors, potential recruitment opportunities and, crucially, more traffic and sales revenue. This is vital from both a start-up and established company position, raising brand awareness.
- Expand the Business
With more staff and equipment, the bigger the premises you may need. A sizeable business loan can help provide the funds to think larger and move your business to a new location, maybe somewhere more central for staff to commute to, or help bring in flexible working for those in hybrid roles. More space means more opportunities to expand and continue growth so that you are not restricted by current size. This can also mean not just expanding office space but also storage facilities or warehousing, depending on the type of business you have.
- Keep Finances Under Control
Sometimes, a business loan can be ideal to keep your business going, especially when experiencing difficult economic circumstances. After all, even when sales revenue is down, you will still have essential expenses to cover such as commercial rent or leasing costs. A business loan can help keep the lights on in the short term when going through a difficult period.