If you’ve got a business that’s stable and profitable, you may take your eye off the ball when it comes to growth and seeking business finance. But the opposite of expansion isn’t the status quo: it’s contraction, as you’re bound to lose customers from time to time.
In contrast, if you make the right borrowing decisions, you can start thinking strategically and investing in the things you need to grow: bigger premises, better people and marketing campaigns.
Of course, you may already have borrowing commitments, which raises a different question: could you borrow more cost-effectively by switching lenders and deals? If so, this too will help you to grow by freeing up working capital.
Here are a few of the reasons you might seek out business finance:
Bolstering your cash flow
Cash flow is the lifeblood of every business: it’s the money you have on hand to pay your people and your bills. This is particularly crucial for businesses with seasonal turnovers: they may make most of their finances in a few months, but still need to pay for rent, telecommunications and other fixed expenses 12 months out of 12.
By lending sensibly, for example, through a line of business credit which acts like an overdraft and where you only pay interest when you use the facility, you can avert any cash flow crises.
It’s also worth remembering that profitable and growing businesses, perversely, are particularly at risk of cash flow problems. Why? That’s because they need to invest in new people, plant and equipment when taking on new customers.
If those customers are slow to pay, they could find themselves unable to meet outgoings.
By having cutting-edge equipment, you can stay one step ahead of your competitors. Take out a business loan over the expected life of the equipment and you can spread the cost, and if you secure the loan you can significantly reduce your interest rate too.
Funding a marketing campaign
If you want to take the edge over other businesses in your sector, you need to market your company: customers are very unlikely to beat a path to your door.
Targeted campaigns don’t have to be hugely expensive, but it is certainly worth investing in the best professional help you can afford, as making a bad first impression is worse than remaining off a customer’s radar.
Paying off more expensive loans
If you have high interest borrowing, for example, a business credit card, an overdraft or a merchant cash advance (repayable through a fixed proportion of your daily credit card sales) – you might do well to switch to a lower cost form of business financing.
In addition, if you consolidate loans with fixed repayments, you can extend the term too, thus freeing up your cash flow.
Don’t forget to talk to Cashsolv
Whatever your reasons for seeking business finance, you need to talk to Cashsolv.
We’re the specialists in small business finance, and we apply quite different acceptance criteria from the big banks so we’ll frequently say yes when the computer says no.
We can also offer a range of innovative solutions, such as emergency loans, asset-backed finance, and invoice factoring and discounting. To discover what we can do for you contact us for further details.