Lending doesn’t just help in the tough times, it can also be instrumental in transitioning from one business life stage to the next.
Below we’ve listed out how each stage of your business, from start-up to maturity and growth, can benefit and be supported by lending.
Stage 1: Starting your business
So, you’ve done all the groundwork, have an awesome business idea and need to get it up and running. Step one is figuring out your key sources of funding. Sometimes these sources can be from those who believe in you and your business, such as family and friends or through crowdfunding. Or maybe you’ve been very careful and/or lucky with your finances and can utilise personal savings or self-financing options.
Although these funding sources are helpful, sometimes they just aren’t enough to get really going. This is when more traditional lending could come into play. There are different types of loans available, with different terms, structures and interest rates. Take your time to work out what’s best for you so you can start your business off on the right foot.
Stage 2: Managing your cash flow
As your business begins to grow and expand, you may face some unexpected expenses, such as needing to pay a supplier this month, with money you won’t receive until next month. Or perhaps you’ve looked to the month ahead and realised you’ll need more money to cover upcoming expenditures than you had originally planned. Needing these unplanned short bursts of cash can often leave you in a bit of a sticky situation. A business credit card or business overdraft may be viable options to consider to temporarily tide you over, until your revenue increases.
Stage 3: Investing in your operations
After laying a solid foundation to your business, you may need to start building out your operational expenses, such as hiring more staff, paying salaries and leasing workspaces. Or perhaps you want to expand your reach to customers through new marketing, to define your messaging and ensure you’re spending money directing your content to the right people. As such, you might find yourself looking to access more working capital. Depending on what operational costs you have, lending can help you fund the next steps you’re looking to take with your business. For example, if you need to upgrade your work vehicles, machinery or equipment, vehicle and equipment financing may help you get the items you need.
Stage 4: Funding for growth
You’ve created a successful business, and you’re waiting to move to the next level … but how? Although your profits may be enough to cover some upgrades, you might just need an extra push to help set up a new store location or grow through diversification or acquiring another company. Similar to when you first set up your business, you can use personal financing, crowdfunding, bank loans or money from friends or family to help you get there. However, you can also use revenue-based loans, where an investor will lend you the money in exchange for a promised share of future revenue. If your business has already had a successful journey and continues to be profitable, this option could be one worth considering for both you and your investors.
Regardless of what stage, business journey or industry you’re in, there are lending options to support your needs and your business.