Taking on finance is a big step for any company; a further commitment to an entrepreneur who may feel they have enough to think about simply running the business. But developing a great idea or growing an existing business takes money. Of course friends, family and savings can be great source of initial cash – but what happens next? How can a loan help you take the business to the next stage?
Improve Cash flow
Flexibility in the bank account to fulfil larger orders could mean that you can bid for higher value contracts – but what if your bank won’t talk to you about their own facilities because your business is too new, or your case doesn’t pass their stringent checks? A business loan from an alternative source could provide the buffer you need to ensure you ride out the turbulent waters of cash flow.
Major investment into machinery or equipment will always require capital. While some lenders are willing to provide asset-backed finance (lending secured against the piece of equipment being bought) – this type of funding is not always readily available or appropriate, for example if you want to upgrade your IT systems and computers. While the cost of such a large outlay may be beyond many businesses, affordable monthly repayments often are not, especially if the purchase results in a greater return.
Employ More Staff
Securing new business often means “staffing-up” to meet the challenge, and people are expensive. Especially new ones; induction, training, HR costs, and that’s before the wage bill.
But, as every good employer knows, your people ARE your business, and investment in those who share your vision, work towards your goals and contribute towards a positive environment maybe one of the most important investments you make – and having the cash to cover the expensive early months before your new team start paying for themselves is one of the most common reasons to access a business loan.
If you have a product as opposed to a service, stock management will be vital. Holding too much perishable stock can lead to waste. Or it could be that a seasonal business needs the most stock when the bank balance is depleted after the quiet season. If that dream order is just about to land, make sure you have the resource to fulfil it. A business loan could be perfect to fill that gap.
If you are responsible for a business, you have already made a significant investment – ask yourself how much more could you get done if you had the means to move from good to great? Whether it is £10,000 or £1,000,000, every day businesses expand their horizons with the assistance of a business investment The North East Fund has a number of options: take a look on our website or ask our fund managers what type of investment is best for your business, your only regret may be that you’d done it sooner.