A startup loan for your business can be difficult to obtain for a new business that is not yet mature, particularly if it’s still in incubation or the concept stage. Smaller startups that only require office space, equipment and supplies may need hundreds of thousands of dollars in order to launch their venture.
Many people cannot afford to start a business without securing loans unless they are willing and able to sell an equity stake or take on angel investors, which often requires a 10% to 50% stake.
Expansion Stage
Both mature and new businesses in expansion will need to diversify their product, service, and offering. An installment loan is a great way to make the necessary investments to continue your product and service offerings, no matter what stage you are in your expansion journey. If you’re looking for a costly expansion plan that is essential to almost every business, business loans can be invaluable.
Recruitment
It is expensive to hire top talent for your company. Highly skilled, newly hired employees will yield greater profits which can help you expand your business. You will be required to wear many hats when you start a startup or run a micro-business. Multitasking will have a whole new meaning.
It can be difficult to establish your brand, assist customers, web design, bookkeeping, payroll, tax, and benefit management. If you and your employees have to manage too many tasks it can reduce the focus and quality necessary to build your business effectively.
Investment in talent will result in increased revenue and help to build the foundation that a successful business needs. Even though it can be daunting to take out a loan in order to hire the right employees, they are the greatest asset of a company and will justify the expense.
Stock
No matter what industry or type of business you are in, inventory is often the biggest expense. Businesses need to make significant investments in inventory before they can see a return. It doesn’t matter where a company is at, it is common for them to require capital to buy raw materials or inventory. A stable supply of inventory allows businesses to keep enough product in stock to satisfy customer demand.
Moving to a new location / Construction expenses
Personal moving is expensive, and this is true especially for businesses. Moving to a new place is not only expensive, but you also have to pay for the equipment and technology needed to move. It can be a financial disaster if you don’t have the finances to make the move.
Many businesses also want to improve or remodel their existing physical locations. You can get a hard money loan or commercial real estate to help you pay for the labor, materials, and development costs.
Equipment
Nearly all businesses need new equipment from time to time or upgrade their existing equipment. A business loan is a great option to help you upgrade your equipment, which will increase your profits and reduce your operating expenses.
Because these loans don’t typically require collateral, a business loan is a popular way to finance equipment. A business loan is required for equipment purchases. In some cases, you may be able to charge that expense on your business credit card. This depends on your credit limit.
The type of loan you need and the amount that you get will depend on your company’s industry role. Some businesses may need more expensive equipment. Farmers, for example, can borrow equipment loans in order to increase their yields over the next year. The extra profits will allow for a quicker repayment.
Problem is that newer/updated equipment is constantly being developed and companies are always in need of upgrading. For business owners, buying equipment is not an option. You should compare the pros and cons of equipment leasing to make an informed decision that will benefit your business. Zena Financial offers multiple types of lending.
Cash Flow Boost
A study by US Bank found that 82% of businesses fail because they have poor cash management. You need to protect your business by preserving cash flow (profits vs. costs). A business loan can help you during difficult business cycles and periods of economic uncertainty.
Partner buyouts
Sometimes, partnerships in business don’t work out. This allows you to purchase the ownership from one partner. Although a partner might agree that this is the best option, it won’t always be possible to have the cash on hand to make the transaction.
A loan is a good option to help you execute the purchase and close it quickly. Although there isn’t one type of loan that can be used for partner buyouts (or any other transaction), you can use most loan products to accomplish this transaction.
Acquisitions
Strategic acquisitions are often a great way for businesses to grow. This type of opportunity is often a time-sensitive one. You need to be able to quickly access capital in order to purchase another business.
