The Purpose of Finance is to help people save, manage, and raise money. The answer is simple enough, but hardly ever spoken or acknowledged, which is a pity because Purpose should guide Actions.
In a perfect world, your business would always have enough money coming in from sales of goods and services to pay for daily operations. But sometimes small businesses need loans to meet their daily operations until their earning assets are sufficient to cover their working capital needs. When banks say No we say Yes!
Taking out credit, whether it's a business loan, invoice finance or an overdraft, allows you to invest in more sales, creating more profit. Successful businesses spot opportunities in the market and borrow the funds they need to seize the moment.
Types of Loans
Equipment financing lets you finance up to 100% of the cost of new or used equipment for your business, such as ovens for a restaurant, machinery or company cars.
Having the resources to keep the right amount of inventory on hand is crucial to keeping your business going. Often you will need additional working capital during slow months or to ramp up inventory for a peak season. Inventory loans, or inventory financing, are designed to provide small business owners the working capital to purchase additional inventory needed to succeed.
Increase Working Capital
Provost contends that taking on long-term debt for working capital also pays off. "You can't grow your business and increase your profits if you're not investing in your company," she says. "For instance, if you have a list of clients, you can only change them into real accounts receivables if you can afford the inventory to sell to them… It's basic business know-how."
Grow Your Business
One of the biggest mistakes business owners make is waiting too long to expand their business waiting until they hit a certain milestone or accumulate a certain amount of working capital. But by then, it may be too late, with demands for the business unable to be met. Businesses sometimes never recover from failing to deliver on growth demands.
Use For Renovations
The business location that was perfect for you in the early days may be bursting at the seams as your business has grown. Renovation and expansion loans can help you build out or renovate your business space to accommodate more customers and more orders.