Small businesses often struggle to grow due to limited financial resources. While saving up money over time is one way to fund expansion, taking out a loan can be a more practical solution. With a loan, your business can access the capital it needs to invest in new that new product you have been waiting to launch, the new staff you need to hire to help, that campaign you have been looking to set live or that new market you have been waiting to enter!
According to a study by the British Business Bank, published in 2020, 45% of SMEs in the UK have used external finance in the past five years. Of those who used external finance, 76% of them reported that it helped their business grow or maintain operations.
Here are some of the most common ways a small business could use a loan to grow:
Invest in new equipment: Purchasing new equipment can help a small business become more efficient and increase productivity. For example, a manufacturer may need to purchase new machinery or if you work in the hospitality industry, new ovens or kitchen equipment may be due an upgrade.
Hire additional staff: As a small business grows, it may need to hire additional staff to meet demand. A loan can be used to cover the costs of recruiting, training, and paying new employees. With more staff on board, a small business can take on more projects, fulfill more orders, and generate more revenue.
Expand the product line: Diversifying a product line can help a small business attract new customers and increase revenue. However, launching new products can be expensive. A loan can be used to cover the costs of product development, marketing, and advertising. By investing in new products, a small business can grow its customer base and increase revenue.
Enter new markets: A loan can be used to fund market research, product development, and advertising campaigns in new markets. By entering new markets, a small business can expand its customer base and generate more revenue.
Refinance existing debt: If a small business has existing debt with high-interest rates, it may be beneficial to refinance that debt with a loan that has a lower interest rate. This can help the business save money on interest payments and free up capital that can be used to grow the business.
When considering taking out a loan, it’s important for small business owners to carefully evaluate their financial situation and ensure they can make timely loan repayments. Making the jump to secure the finance alone can also be a daunting thought as many aren’t sure where to begin.
If you would like any guidence on how to move your business forward, G&G has the necessary skillset to help you manage your business more efficiently and more profitably. if you would like some assistance, please dont hesitate to contact us.
From business planning or Business Administration to assisting with your organisations growth, we are happy to advise and help where we can. Get in touch to start your no-obligation consultation!
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