Some business owners loathe loans. They believe a loan means that you are not managing the business well or making it on your own. Often, though, a loan can give you a boost that not only helps you where you are but lifts you toward business growth.
1. Maintain Ownership
Finding new investors in your business can be exciting, and you don't have to pay the money back. The downside is that you lose a stake in your company, so when you grow, you lose the percentage of that growth that you gave up. Funding through a loan gives you control and doesn't cost you equity.
2. Acquire Space
Sometimes you outgrow the space you have. Bigger or additional space comes with a big upfront cost, but if you are growing into it, it can pay great dividends down the road. A loan for a new space can help lift you there when you are ready to grow.
3. Upgrade Equipment
Similarly, as your business grows more sophisticated, your original equipment may not be ready for prime time. An equipment loan helps you acquire what you need to operate more efficiently and produce your products for a growing customer base.
4. Build Inventory
Many businesses have hit a growth point where inventory levels suddenly become insufficient for demand. Falling behind on orders is a great way to lose the customers you have and the new ones who are coming through the door. A loan to jump-start your inventory can keep you from falling behind and give you a chance to keep up with your own growth.
5. Hire Help
Beyond inventory, you might not have the people you need to keep up. Whether you need to add to store staff or your production team, bringing in new people requires additional investment of time, resources, and money, before those people are even ready to contribute. When you need to staff up, a loan can help with the early hit and give you a chance to ease into your transition.
6. Bridge a Gap
Whether your business is seasonal or just has an unexpected lull, a loan can do more than just keep you afloat. When you know the next wave is coming, a loan can help bridge the gap and prevent you from dipping too far into your stores or even your personal resources. Don't be afraid to cushion the blow of a down period.
7. Test New Markets
Finally, you may be ready to move beyond your initial market. Whether you want to grow geographically or online, a loan to help with market assessment lets you test the waters and decide where best to grow next.
Business loans do not have to be desperate or defensive. If you are ready to grow and need a financial boost to do so, a business loan can lift you into the next stage of your development.