Business finance is on the rise. Banks and lenders are offering more finance solutions and businesses are making the most of available funds, using finance to fuel growth.
Almost every business considers business finance at some point. But how can you decide if it’s the right step for you to take? Applying for funding at the right time can be exactly what your business needs to grow. But applying before you’re ready can result in rejection, or even worse a wasted opportunity.
So to help you decide if your business could do with extra funds, here are six signs that you need to apply for business finance.
You Have Cash Flow Issues
Cash flow issues can arise when money is spent on manufacturing, labour and other fees before customers have paid. Seasonal businesses can also experience cash flow problems when sales decline, but running costs remain the same.
A business loan can help you to manage cash flow issues. With business finance, you can cover any costs even before you’ve received customer payments.
Old Equipment Is Damaging Your Productivity Levels
Often business processes are reliant on equipment or technology. But older equipment is usually slower and not as effective as newer technology. Not only does this interfere with your business’ productivity, but it could also prevent you from taking on more customers. So if you want to make sure your business thrives, technology needs to be up to date.
If your current equipment is holding you back, you should apply for business finance. With a business loan, you’ll have the opportunity to buy new equipment without breaking the bank. This takes off a lot of financial strain and allows you to improve your business processes and productivity.
You Need to Place a Large Inventory Order
Ordering in bulk is cheaper than placing smaller, more regular orders. But large orders involve a high upfront cost, which is where business finance comes in. Advanced funding allows you to pay for orders, so you can prepare for increased demand, or cater to a large customer.
With business finance, you can place orders without worrying about the upfront cost. And it’s not just standard business loans you can use for this — there are different types of business finance which can be used to fund orders.
You Need an Effective Marketing Campaign
Marketing is a necessity if you want to put your business on the map (literally or digitally). But if you want real results, it’s worth paying an expert (or group of experts) to manage your marketing campaign.
But marketing campaigns can involve hefty upfront fees. So if you don’t have the funds to cover the initial costs, business finance can be used to pay for the campaign. And once your marketing campaign is in full swing, you’ll start to see a good return on investment as more customers flock to your business.
You Have Big Plans for Growth but Not the Finance to Fund Them
If there are growth strategies you’d love to apply to your business, applying for finance could be what sets that growth into motion.
Often businesses hold themselves back from innovation and expansion because they don’t have the necessary funds. They’ll wait years for funds to build up before growing their business. But if your business is ready for more customers and more exposure, every day you put off growth is another day without increased revenue.
Using business finance for growth allows you to get to where you want to be in terms of business size and revenue without wasting time. Opportunities for growth come and go — for example, gaps in the market quickly close up. So additional funding allows you to act quickly on any growth opportunities.
Your Business Is Growing Scarily Fast
Rather than not having the funds to grow, you might have the opposite problem — your business might be growing too quickly for you to keep up with. Sometimes businesses start to grow rapidly — regardless of whether you’ve been working on expanding or not. Trends and social media can spark interest in your products and cause an influx of customers.
It’s hard to imagine business growth feeling like a bad thing. But if you don’t have the equipment, staff, products or resources to cope with increased demand, you’ll quickly start to lose customers. And in the business world, mud sticks. The last thing you want is a reputation for being unable to cope with large orders or a busy shop.
So if you suddenly experience unexpected business growth, you should apply for business finance as soon as possible. You can use a business loan to upgrade your business to cope with the growth. From ordering stock to hiring staff, extra funds can help you handle the increased demand.