The start of any new business is an exciting time and dreams of expansion and growth are at the core of any plans. Business owners soon realise though that the start-up process is a relatively simple one, it is making sales and business growth that take the most effort.
However, when the time finally does arrive to take the next step and plan for business expansion it is important to know what your options are for raising cashflow to facilitate planned growth. Many people turn to personal sources of finance from credit cards to family and friends. However, these are not always the best options.
It is vital to fully research your options before deciding what type of funding you require.
Firstly, evaluate whether you actually require external funding. Could you make adjustments within the business to improve cashflow? Review your prices, costs, debtors and sales. If you then decide that you need to borrow funds there are several things that you need to ask yourself.
- Is your business ready to expand?
- Do you have the cashflow available to repay a loan?
- Is your business healthy?
- Can you make regular payments on schedule?
- Do you know what your company credit profile looks like?
Before you start the application process find out your score using one of the major business reporting bureaus such as Dunn and Bradstreet, Experian or Equifax. Don’t forget to check your personal credit rating too. The healthier your position the easier it will be to secure funding.
Think about which loan term suits your expansion plans. The shorter the term usually the higher the payment but overall the cost of the loan could be less. Conversely a long-term loan may have lower monthly repayments but the total cost of financing that loan may be higher. Match the loan term not only with your cashflow but also your expansion plans.
Finally, knowing where to access funding will also help. At NGI we have a number of options for business owners which will help increase your chances of successfully acquiring a loan. Our secured and unsecured business loans are ideal for businesses who need support to accelerate their growth.
In short be very clear about your needs, the health of your business and your expansion plans before you take the next step. No matter what stage you are at in this process, we can guide you and ensure that you have the right financial solution to help you with your business growth.