Here’s a no-brainer question for you… When do you need money? Well, the answer is all the time. Here’s another one… What can you do with that money? Just about everything, we presume. Every penny counts, after all.
A business owner will adhere to this fact. Businesses need money as the foundation of its operation. At every stage of a business lifecycle, there is one common aspect. For a start-up, it will be the initial investment whereas, for an established business, possibilities are many.
The fact of the matter is also this that businesses are known to have a difficult time when it comes, financially. This can be due to any reason: an increase in the rate of foreign exchange, bad debts, delayed payments from debtors are just a few reasons. However, instead of losing out on hope, there are options and a business loan is one of them.
When you look at the Balance Sheet of a company, a small business loan usually falls under the liability section. Don’t be scared of that word. While it is just a segmentation of the funds, a business loan is a blessing in disguise for a business.
Applying for a business loan is not that hard. Financial institutions like Tata Capital have a rather simple process when it comes to applying for a business loan. Company documents, a business plan and audited financial statement are some of the documents you will need to furnish while applying for the business loan. For the technology savvy businessmen, they can also apply online for a small business loan.
Once you avail the loan, the possibilities are endless. Now the question arises is what can you do with the small business loan you have? Here’s a little glance:
- Infuse in working capital:
Before you start spending your business loan, look at your working capital situation. When we say working capital, start with your suppliers. If you have creditors who have aged more than six months, start by paying them. It does not look good on your business if you have a long list of outstanding creditors. Look into you other payables including employee salary.
- Invest in insurance:
While planning our business, how many of you must have considered investing in a comprehensive insurance policy? While you may have the basics in place you will need to look into protecting all your assets including your manpower, machinery, stock and be secured when it comes to natural calamities as well. Imagine if you were in a situation where your business premises including your manufacturing unit got flooded due to torrential rain and your insurance did not give you the right cover. You would not only be shelling out more money to fix the damages but also incurring heavy expenditure. This will give a negative effect on your books as well. Instead, with your small business loan, invest a small yet extremely important part in buying an insurance policy.
- Be updated:
Business loans are like a lifesaver. If you have availed an online small business loan, this is your opportunity to keep your business and company updated. You can now think of buying new machinery for production, better spare parts and even update your software for back-office work like accounting as well. If you do not update your business and work, you may get left behind in the rat race. Business loans, here, come handy.
There comes a time in every business when you need to grow. If you have a business loan, why not use it for expansion. Invest in a new place or rent new premises, maybe some new machinery or even a product line. You can also use your business loan to expand your manpower as well.
- Play up your marketing:
How will you make money if you do not give your marketing a boost? With your business loan, you can increase your marketing spends. Most companies often find it difficult to spend on marketing as funds are usually diverted into working capital or other needs. Instead, us your business loan to add some power to your business’s marketing. This will help you generate business for the future.
If you want to succeed, you will have to take a chance in life and in business. A business loan may seem like a risk to you but it’s a calculated risk that will help you if you spend it wisely. There is no shame in asking for help, that’s what we tell ourselves. So why not ask for help from NBFC’s like Tata Capital that can help you succeed in business as well. After all, every penny counts, right.