6 best ways to use a business loan
Thursday, 25 July 2019
Before you undertake the business loan application process and find out whether you'll be approved for a business loan, it's important to determine how you'll spend the funds.
Some lenders will require details about how the funds will be spent before they approve a loan. Taking time to strategize will help you prepare when the time comes, especially if you access a quick business loan that can be funded almost immediately.
Small business loans can be used for almost any business purpose, but certain uses may bring more value to your business. The way you choose to use a business loan will ultimately depend on your business goals and assets. Consider these six approaches to successfully using a business loan.
If you have a retail or other business that requires you to maintain inventory, you can use a business loan to replenish inventory or to stock up in advance of a big marketing push. Look for a term loan with a high borrowing amount and a longer repayment period if you're planning to make a large, one-time purchase.
When your bakery needs a new commercial oven or your construction company needs a bulldozer, it's common to use a business loan for new equipment. Think about how your new equipment will allow you to expand your business to determine whether it's worth the cost of borrowing.
3. Hiring and training.
In today's competitive employment environment, with almost negligible unemployment rates, finding and attracting top new hires is a constant challenge. If a new hire — or additional training for current employees — could help you expand your business or provide new services, that could be an ideal use for business loan funds.
Whether you need a new website, a rebranding initiative or a content marketing strategy, effective marketing costs money — but can yield huge returns for your business. Do some research to determine how your marketing dollars can best help boost your bottom line.
5. Product development.
Forward-thinking companies sometimes need to launch new products or services to keep serving their customers and reach new prospects. If you're prepared to develop or launch a new product that will move your business forward, this may be the best place to use your business loan funds.
6. Working capital.
Sometimes the best use for a business loan is simply to provide you with extra working capital to keep cash flow moving, help cover payroll and other expenses as you wait for customers to pay invoices or for new initiatives to pay off.
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