Expansion holds the dual status of being both the riskiest and the most exciting move a business owner can make. Whether it involves taking on new members of the team, broadening your product range or opening up a new office, changes can’t be implemented without the availability of cash. So how do you finance your growth plans?
Managing the cashflow
The cashflow is the lifeblood of a company, and no enterprise can survive for long if its fluidity is not preserved. If you plan on financing growth with the firm’s everyday cash, it could well be a wiser move to consider an external source of finance. Outsourcing for a business loan takes the stress away from your company’s own funds and places it instead on a separate pool of funds.
Making the move to take out some form of loan means that, if your expansion project lands itself in a rut before it even comes to fruition, you’ll be able to keep the business running as it was before while you pick up the pieces, assess what went wrong, and plan your next move.
More than profits
Your company’s profits might show that it’s doing well in the short term, but they’re no real indicator of whether or not it will be robust enough to survive the move into a brand new battleground.
It’s fairly commonplace to see profitable start-ups fall flat before they leave the fledgling stages of their operations, all because bosses believe they have the financial means to fund expensive new projects. A reluctance to borrow when appropriate, and take on a manageable debt, can deal a crippling blow.
A tailored approach
No one wants to pay for something they’re no longer using, so it makes sense to find a loan that closely matches the assets being funded in terms of lifespan. Assess the terms offered to you by the lenders, and pick a loan that will allow you to match the length of time you’re going to be making repayments with the number of years you expect the new asset to be in use.
Consider the bigger picture
As such, if you’re taking out a business loan, you need to think about more than just the interest rate. Consider the terms of the agreement – how much will you be charged in the way of administrative fees? How much reassurance from you does the bank require?
More flexible terms will work in your favour, and speaking to a reputable provider of finance and accounting services will see the most suitable options laid before you.