7 Creative Ways to Use Start Up Loans to Fast-Track Growth

1. Expanding Your Business or Opening a New Location

Eventually, your business will reach a point where the next natural step is expansion. Depending on your business and industry, that could mean:

• Expanding your current location with additional space

• Opening a new location to generate higher revenue

• Adding related products or services to your list of offerings

Whichever way you go, it won’t be cheap, and working capital may not cover all the costs for the long term. Using financing to grow your small business gives you the cash you need to lay out. While the expenses can be steep, especially in the beginning, the potential ROI could be substantial.

2. Build Your Customer Base Through Marketing

No matter how robust your business growth strategy is, you’ll always need more customers. Customer referrals can help you out when you get started, but marketing allows you to attract the customers you need to reach that next milestone. 42% of small businesses fail due to a lack of market demand, so proactively building out a marketing strategy helps you keep cash flow smooth. While you can get started marketing your business on a low budget, you’ll eventually have to scale. Hiring a marketing strategist, team, or agency costs money. To see the results you’re looking for, you’ll need cash to hire employees, and cover other expenses, like:

• Building a website that acts as the best possible selling tool for your business

• Establishing an online presence through creating content that boosts your website’s SEO value and helps customers find you on Google

• Run advertisements for targeted keywords

• Re-engage old customers through targeted email marketing

Utilizing small business financing to cover various (but important) marketing costs can help your business grow.

3. Extra Cash on Hand for Sudden Expenses

No matter how thoroughly you plan, there’s always a chance for sudden expenses. Instead of hitting a roadblock and stopping dead in your tracks, financing gives your small business growth strategy flexibility. With extra cash on hand, you can cover sudden expenses, instead of reconsidering or abandoning your strategy.

4. Seasonal Slumps and Opportunities

If your small business experiences a rush during one period of the year, and a slowdown during another, then you’re not alone. But, you also don’t have to simply accept this as a reality. Small business financing can aid your growth by allowing you to keep the momentum going during off-periods, while fully capitalizing on opportunities. As cash flow decreases during a seasonal slump, you can use extra cash to continue improving your business. When business is about to pick up, financing can help you put the right gears in place to stock up on inventory, hire more employees, and more.

5. Buy New Equipment to Replace Old Machinery and Improve Your Processes

Footing the bill for new equipment isn’t always possible when you’re covering other expenses in your small business and renting it just doesn’t make financial sense. Using financing to buy new equipment, which you’ll then own forever, helps you get a competitive edge. Outdated equipment can slow your business down or limit the quality of the products/services you provide. Buying new equipment streamlines things and may help your business reach the next level. In other cases, new equipment can also help your small business pivot into a related industry and provide customers with additional value. Rather than purchasing equipment outright or renting, equipment financing helps you achieve your small business growth goals with a more manageable payment structure.

6. Buy Inventory in Bulk to Get Better Terms from Suppliers/Vendors

Whether you’re approaching a busy season or simply want to scale, buying in bulk allows you to purchase more inventory at a cheaper rate. Financing can give you the extra cash you need to buy more inventory and ultimately, yield a higher profit. Without enough inventory on hand, your small business could be missing opportunities to maximize profits. Buying in bulk helps your business in other ways, too. Beyond tapping into discounts, you may also have more time to pay, expedited shipping, enjoy priority access to limited items, and other value adds.

7. Hire All-Star Employees to Help Achieve Your Business Goals

Even the best business growth strategies can fall flat without the team you need to execute them. Hiring employees to take your business to the next level can, however, become expensive. The hiring process alone can be expensive, between the time you spend finding, vetting, and interviewing candidates. Beyond that, you’ll have to foot the bill for salary, insurance, equipment, and more. Employers are always vying for top candidates, so if you don’t want to lose employees to competitors, then it may also make sense to invest in a good culture that encourages employees to stay. From team outings and catered lunches to professional development opportunities, fighting to keep employees on board can help your bottom line. Having extra cash on hand gives you the wiggle room you need when it comes to hiring employees and paying for other expenses.

What Are the Types of Small Business Start-Up Loans?

Small business start-up loan financing options vary by how they’re structured, what they require of you, and what type of organization you’ll use. Here are the most common small business start-up loan types:

1. SBA Loans

The U.S. Small Business Administration (SBA) offers several loan programs. SBA loans don’t lend directly, but it guarantees loans made through partner lenders, which reduces risks for banks.

• SBA 7(a) Loan: The most common, allowing up to $5 million for a variety of business needs.

• SBA Microloan: Provides up to $50,000, ideal for much smaller start-ups.

2. Microloans

Nonprofit organizations offer microloans for small businesses. These are considered small loans typically under $50,000. Microloans are ideal for entrepreneurs from underdeveloped or underexposed communities that might have limited access to funding. Further, these loans provide an opportunity for those with limited credit history.

3. Business Credit Cards

Like any regular credit card, a business credit card can be used as a flexible funding tool for everyday expenses. For small businesses specifically, some cards come with 0% APR introductory periods.

4. Online Business Loans

Start-up business loans provided by online lenders offer faster funding and less stringent requirements than traditional banks.

5. Equipment Financing

Loans that are specific to financing equipment allow businesses to borrow money in order to purchase equipment, with the equipment itself serving as collateral.

How to Apply for Start Up Loans?

It is easy for business owners to find and compare the loan options they qualify for. Take a look at the steps below.

• Minimum Lending Criteria: First, you must check if you meet lender’s minimum criteria when it comes to credit score requirements, time in business or revenue generated.

• Application: Once you know that you meet minimum requirements to apply, you can complete digital application and securely upload the relevant documentation.

• Lender Review: Only submit your application to the lenders most likely to return a competitive offer.

• Options Review: If approved, your Business Finance Advisor will reach out once your offers are ready. They’ll review each one in detail, help you forecast, and guide you through the process of selecting the best offer

• Get Your Funds: After selecting the best offer, your funds will be deposited into your business bank account shortly after.

Conclusion

Your launch doesn't have to be a struggle. By strategically utilizing start up loans, you can invest in the talent, technology, and marketing needed to stand out in a crowded marketplace. Whether you are seeking small business startup loans to fill an inventory gap or looking for massive startup business funding to disrupt an entire industry, the capital is available if you have the right plan.