Is your small business ready for growth? If you open a second place, you can serve more customers or increase your revenue by expanding your product line.

No matter what your business needs to grow, you need cash and capital to succeed. Getting the right loan is key to your business success.

Is your business ready to expand?

How do you know when it is time to expand your business?

Consider your current market. Are you full of things you can do there, and is there a new market you want to win? Did you know that you are gaining a new customer base that attracts your product and you can successfully expand your reach with a little marketing?

Or you may be thinking of a new product that you can sell. All you need is a capital to buy and sell.

Maybe you have the opportunity to buy a competitive business and take on more market share. Or you may be too busy and need extra help.

These are all signs that it is a good time to expand your business.

How to make business expansion money

Opportunities require investment, and not every business has the capital to expand. Fortunately, there are many types of loans to help borrowers do this.

The idea is, by lending money to grow your business, you will bring in more money, which will make it easier to pay off debt. It is an investment in your future business!

In this article, we will look at your options for small business loans that you can use to hire employees, pay for the market, renovate your place, or repay your old debt.

Small business loan options for business expansion

Now let’s look at your small business financing options, from working capital loans to credit cards. Remember that you have different options regardless of your credit profile. Financial institutions, such as banks, credit unions, and online lenders, offer a variety of financing options.

Time loans

Well-established businesses can qualify for larger loan agreements with a traditional bank or credit union. These are usually offered at the lowest interest rates.

SBA loans

Some lenders are allowed to offer SBA loan programs such as SBA 7 (a) loans and microfinance. These microfinance loans offer easy and low interest rates to qualify for traditional loans. SmartBiz is one such lender.

Credit Line

If you like the idea of ​​getting cash when you need it (instead of borrowing it all at once), consider getting a business line credit. You only have to repay the loan. OnDeck offers an excellent credit option.

Equipment loan

If you want to expand by purchasing new equipment, an equipment loan is ideal. The machine or car you are buying serves as a collateral for the loan, which will help you get a lower price. Check out LendSpark for an affordable price.

Commercial Real Estate Loan

It may seem like adding an extension to your business. In this case, a commercial real estate loan may be helpful. These have long pay terms (25-30 years, usually) and low interest rates. SmartBiz is an option to consider.

Short-term loans

You may need a quick cash injection to purchase goods and services and know that you will be refunded in a few months. If you do not have the maximum credit score needed to get a long-term loan, consider the short-term loans offered by LendSpark.

Business credit card

If you want to know how to pay when making purchases, consider a business credit card. Look for promotional 0% APR and rewards.

Is a Business Expansion Loan Right for Your Business?

Small businesses that have the opportunity to expand their business may not be able to do so if they do not have the capital. But you should not limit yourself to this because you have so many loan options.

Ask yourself if the investment you want to make (hiring, trading, buying) will make enough money to cover the debt. If the answer is yes, then business ventures may be a smart idea.

What to consider when choosing a small business expansion loan

There are many types of loans that can be used for small business expansion, and each of these lenders has different requirements for financing small businesses.

What is your credit status, including both your business and personal credit results? If you have stellar credit, you may be able to get lower interest rates, which will reduce your financial costs and monthly payments. If your credit is poor, the value of the loan may be higher than you expect it to be.

How long have you been in business? A startup that has been operating for less than two years may not be eligible for a SBA or bank loan and will need to look at short-term loans instead.

Think carefully about the amount of loan you want to apply for. It can be challenging to spend more than you need to, but if your monthly payments are high, can you buy pay terms?

Another thing to note is that some loans require prepayment or collateral. Do you have money or property for this?

Also, look at any possible payments for unsecured loans. For example, if you want to repay the loan in advance, are there any advance penalties? Late payments if you missed the payment deadline? These increase the cost of the loan.

How to prepare for a small business expansion loan

Once you know you are eligible, you can narrow down the types of finances you are eligible for.

What you need for the application process varies depending on the type of loan. A traditional loan or SBA loan may require you to provide a business plan and financial, but an online application only needs to know what your annual income is.

Some loans – especially loans from banks or SBAs, can take weeks to process and finance, so plan before you apply.

What can a cash injection do for your business? What dreams could the dream come true if you were the capital? Small business loan can make your dreams come true!

This article was originally written on November 19, 2021.

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