Is it time to take out a business expansion loan to help your company grow further?
Here are five key questions to ask before you act on getting a business expansion loan:
- Are we ready for business expansion funding?
Your small business growth and expansion success hinges on your ability to do one of two things: find more customers or expand your products and services.
Finding more customers will allow you to increase sales of your current products and services. Expanding your business’s products and services will give existing customers the opportunity to purchase something new and different, while also attracting new customers.
If you can’t find more customers or expand your products and services, you may want to ask: Are we truly ready for business expansion?
- Where are we going?
If you are ready for a business expansion, it’s time to think about the right location. Do you want to own or rent?
Buying a facility is a big commitment. Commercial mortgages are typically offered at shorter rates than residential — expect 10 to 15 years. Shorter terms mean higher payments. Is your small business prepared to handle this increase?
Renting is safer but less stable. There’s no guarantee that your space will remain available beyond your lease. Renting also means the additional cost of paying an up-front deposit, often the first and last month’s rent.
If your new space needs improvement, you must set aside funds from your business expansion loan for construction or renovation. New locations in the same market also siphon off about 20 percent of the original location’s business. Is your bottom line strong enough to absorb all of this?
- Do we have the right people? (And, can we afford them?)
You can’t expand without taking on new employees. Additional employees equal additional wages and benefits. While a business expansion loan can help you afford more employees, you will likely save money by hiring strategically. Make sure to consider the value of hiring the right employees for your small business; if you work in a niche industry and find it difficult to hire talent with the right skills and experience, a business expansion could be even more challenging. Your expansion won’t go well if you compromise in hiring standards to fill new positions.
Management must be able to trust employees during an expansion, because it by nature reduces management’s ability to be hands-on in all aspects of the business.
- Can we maintain a stable inventory?
Inventory management is one of the biggest challenges for businesses. As you consider how to grow your small business and consider your expansion financing options, think about your ability to manage an increased inventory.
Industries that see seasonal ebbs and flows in demand must put extra effort toward mastering and maintaining a stable inventory. Additional capital can help stabilize inventory by keeping products stocked at optimal levels during periods of fluctuating revenue. Without proper inventory financing and management, you’ll find that your warehouse is either overflowing with unsold products or empty and unable to fulfill orders.
- Where will we find business expansion financing?
Here’s where it all comes together. Unless you’re overwhelmed by cash on hand, you’ll need a business expansion loan to help cover the cost of new facilities, new employees, increased inventory and the many other realities of growth. Do you have a good source for business expansion financing?
Fundation exists to help businesses just like yours. We provide business expansion loans that can be used to secure a new facility, add new talent or master your inventory.
All of our business expansion financing is custom-designed to meet the different needs of unique small businesses. Our loans feature conventional terms, refinancing options and prepayment without penalty.
Do you need capital to finance a business expansion? Contact Fundation and explore the possibilities today!
More News
Visa boasts of fintech Fast Track success
May 14, 2020
New York City Credit Program Aims to Help Female Entrepreneurs
November 14, 2019
Import/Export SMBs Introduced to Fintech Lending Options
August 7, 2019
Online Loans You Can Take To The Bank
April 23, 2019
Case study: Citizens Bank – fintech friendly
February 19, 2019
2018 Best of FinXTech Awards Finalists Announced
March 29, 2018
Citizens Digitizes SMB Lending Process With Fundation
November 6, 2017
Park Bank Announces Expansion of Small Business Lending Efforts
November 2, 2017
Defining, Adopting and Executing on Fintech
September 5, 2017
Fundation CEO Talks Partnership Strategy
August 4, 2017
Fundation works with, not in place of, banks
April 3, 2017
Fundation Secures Credit Facility from MidCap Financial
March 21, 2017
Where the money is: A small business lending gap
March 3, 2017
Q&A Break with Sam Graziano, CEO of Fundation
January 18, 2017
Fintech Ideas Festival Rapid Fire Emerging Tech Panel
January 17, 2017
Citizens Bank Next To Take The Leap With Alt-Lender
December 21, 2016
Regions Eyes Small Business Loans in Latest Tech Deal
September 22, 2016
Is The Future Of Alt-Lending Playing Well With Others?
August 30, 2016
Best Alternative Small Business Loans 2016
May 27, 2016
Frenemies In the Marketplace
April 29, 2016
Bigger Bang In Small Biz
April 1, 2016
How To Get A Small Business Loan (Webinar)
March 29, 2016
Fundation Expands Small Business Lending
March 4, 2016
Top 25 Financial Blogs for Small Businesses – 2016
February 22, 2016
CEO Sam Graziano on MSNBC’s Your Business
February 18, 2016
Bank Branches Are Still Good for at Least One Thing
February 17, 2016
Fundation Named Finalist In 2016 Stevie® Awards
February 12, 2016
A “Meaningful” Platform-Bank Partnership?
January 6, 2016
Late on a Loan Payment? How To Do Damage Control
October 21, 2015
Regions Inks Unique Deal to Tap Booming Fintech Industry
October 13, 2015
Best Alternative Small Business Loans – 2015
October 6, 2015
Fintech strikes again; Regions partners with start-up
October 5, 2015
Investing in Alternative Lending?
May 1, 2015