All business owners will come up against various financial challenges when trying to make their company successful, and many will need an extra boost to help them achieve their goals. If your finances are healthy, and you’re using them to fund your business – great! But if you haven’t managed to save enough to get your business to where you want it to be, financing your business can be a useful option. Merchant cash advances, small business loans and bank loans can all make a huge difference and can assist you in becoming successful.
Types of business finance
There are many reasons why businesses need finance, and if you don’t have funds built up in your savings to help, you may need to look for alternative ways to obtain cash for your business. If you’re looking for a finance solution, short-term or long-term, there are lenders that can help. Here are a few of the finance solutions you could choose whether you’re a new or established business.
- Traditional bank loans: This is the most common way of financing your business – you can benefit from a range of loan amounts, interest rates and repayment plans from your bank, however, your business must be over 2 years old to qualify.
- Small business loans: This type of loan is specifically aimed at small businesses that are looking to grow – it can be used for anything you need, like new equipment or training new staff.
- Merchant cash advances: Applying for a merchant cash advance means you can benefit from a lump sum of money, which you then pay back with a percentage of your business’s sales. Your business must take credit card sales to be approved for this type of finance.
- Equipment loans: This type of loan works for companies that need machinery and heavy equipment to function, and don’t have a lump sum to pay for it. This allows you to pay your new equipment off in smaller, more affordable chunks.
So, now that you know a few of the types of business finance that you could choose if you needed it, read on to find out more about how you could benefit from having these funds at your disposal.
Business finance is important as it can generate profit. There is a saying that you need money to make money – and in business this is true. You’re going to need to invest in areas of your company so that you can begin trading. For example, you may need finance to obtain premises to sell your goods from, as well as buying stock so that you can sell it to make a profit. If you’re a new business, you may not have savings built up to use, this is where your chosen type of finance comes in.
Allows your business to run smoothly
As previously mentioned, you might need certain equipment or technology for your business to run as it should, so that you can make a profit. As well as this, you may need to invest in training your employees or hiring a manager. You can use finance to help with this, so that you can benefit from a business that runs efficiently, in a productive way that can maximise sales. Make sure you take the time to allocate your funds carefully so that you can reap the rewards.
Survive hard times
Having a reserve of cash means that your business has a safety net if you fall on hard times or find yourself struggling financially. Therefore, it’s so important that you take the time to build up a pot of savings as soon as your business begins to make a profit. You can use business finance options to get you off the ground, but it is up to you to save funds for an emergency expense. If you can’t save, you may find yourself in difficulty if there is a recession, or you have to pay for an unprecedented situation, like repairing damage to premises, or equipment.