A fundamental misconception about business loans is that businesses that are facing huge losses acquire loans. However, companies can obtain loans despite being profitable to increase access to working capital and enhance sales.
A business credit survey shows that many businesses were profitable but required funds for improving and expanding. It is where business loans would come in handy and help in unlocking opportunities for growth.
Let us dive into some meaningful discussion and learn how smart usage of business loans can take businesses to the next level!
It is essential to focus on two things
- Factors that facilitate growth and expansion
- Sensible spending decisions
Most importantly, focus on your business goals.
- Invest in marketing:
Marketing is the most crucial aspect if you wish to see an instant boost in your sales. It allows businesses to maintain long-lasting relationships with their customers. How else would the consumers know about you and your latest business ventures?
One hitch with marketing is that it requires a good chunk of money and professional assistance.
Keeping in view the benefits that a good marketing plan yields to a business, it is not at all a harmful spend. You can spend on marketing software, or getting your marketing team trained to come up with better strategies.
A smart spend of your business loan for marketing will ensure better brand visibility and increased return on investment.
- Acquire equipment:
Best quality equipment is essential for your business to bring out optimal results. If you want to stand out from your competitors and provide your consumers with the best quality products and services, you need high-quality equipment for your business.
Proper quality equipment improves functionality and increases productivity. If your business requires materials that are very costly, you can get the material on lease. This will not make you spend a considerable chunk of your loan solely on the acquisition of equipment, and you can pay monthly lease from the profit your business makes each month.
- Add new lines to your product/ services:
You may have realized that an added product or service may benefit the business but didn’t have investment to do so. You can spend your business loan in expanding your business.
Increased product and services may require an increase in staff or expansion of the business location. But, if you have done thorough research and are sure that the added product/ services would be beneficial for the business, it is worth taking the risk.
The best situation to take this high-risk step is when the demand for a particular service or product is high and there are no provisions for it.
- Expand to new markets:
This may seem a high-risk and bold step for business but, often venturing into new markets proves helpful. A new market means new consumers, new location, new competitors. It also means obtaining higher chances of a boost in sales and making your mark in a different market.
You do not need to go for a geographical change in tapping new markets. You can invest in online advertisement and touch neighboring cities or areas without changing your location physically.
- Invest in technology:
Technology has advanced a great deal. A smart spend on a technological system for your business can do wonders. Consider acquiring a point of sales system or a customer relationship management system. You will be surprised to see the benefits these technology-based acquisitions your business will reap.
- Buy inventory in bulk:
Sometimes you get an opportunity to buy inventory on discounted rates. Often, the catch behind these discounted rates is the condition to buy it in bulk quantity.
If you can foresee profit margins on this deal, utilize your business loan in buying inventory. Be sure to get your math correct. Include storage or warehouse rental costs in the overall inventory cost too. Don’t be overwhelmed by the low inventory cost and make a hasty decision.
- Buy a competitor’s business:
Have you ever imagined how it would be to buy a competitor’s business? Wouldn’t it be great to get hold of a company that has always been a threat to your own? And wouldn’t it be wonderful to grow your business quickly?
If such an opportunity comes, think diligently. Use your business loan and do not miss an opportunity that looks promising.
- Hire additional workers:
Over-worked staff can never yield optimal results. If you think your business can do better with hiring a few more workers, do not think twice.
While hiring new staff, be very careful. You will be using business loans to initially pay for their monthly salaries and you do not want to wrong spend your precious money. Go the extra mile and choose the best staff available. You can hire specialized sales personals to enhance your sales. Just in case, you are clueless about the hiring of staff, our guide for conducting situational interview questions will cover all the basics required.
- Sell on credit:
If used wisely, this service can bring you many customers and a boost in sales. If your business operates with other companies, they may find your ‘on-credit selling’ very attractive.
You can maintain your cash flow from the business loan.
Owing to the facility offered by you, several new businesses may show interest in collaborating with you. Be mindful and set out firm terms for monthly payments.
- Train your employees:
It is imperative for a successful business to have trained staff. Invest in training programs or your employees. Training programs will build loyalty in your workers and will encourage and motivate them. You will be glad for making this spending as it will enable your workers to discharge their duties in a better way.
If you are thinking of getting yourself a business loan, there is an even better option. Consider the merchant cash option that is approved and deposited very quickly in your account.
About The Author
Sohail Rupani is a senior SEO strategist at PNC Digital, a digital marketing agency based in Orlando. He specializes in SEO and SEM techniques. He is passionate about technology and loves to analyze the tech industry in his spare time and stay in touch with the latest happenings. He also writes technical articles about SEO and digital marketing. Follow @sohailrupani for more updates.