Whether you own a small or big business, you need capital to grow and sustain it in the current competitive industry. One of the effective ways to do it is to avail a business loan by meeting specific business loan eligibility criteria. You can use the loan amount in various ways, which are discussed in the upcoming section of this article. So, keep reading to learn more about them.
What Are the 12 Ways to Expand Business Using a Business Loan?
Consider the following ways to grow your business with a business loan:
- Purchase new machinery
It is crucial to purchase new machinery and equipment to increase production in your company. However, machines are expensive, so your existing savings may fall short. With business loans, you can easily finance your machinery purchases.
- Recruit skilled workers
If you are keen to expand your business, you need to hire more experienced workers. However, paying the workers during the initial phases of expansion is difficult. You may also require excess funds to train newly recruited workers, and for all these, you need financial assistance. You can get this monetary support via a business loan to meet such expenses.
- Create a solid relationship with your suppliers
A successful company depends firmly on relationships with your suppliers. However, the most common difficulty you may face is paying the money to suppliers for buying inventories. Using a business loan, you can pay the required amount within time or early. This will build trust between you as a business owner and your supplier, which will later help you to take supplies on credit during challenging times.
- Boost marketing of your company
In this digital era, you must improve your digital marketing strategy to make your online presence prominent before your target audience. This will boost your company’s sales and increase its returns on investment.
However, monetary assistance is required to support such marketing tactics, which you can do through a business loan. For example, you can borrow and use the fund to develop a new website or improve the existing one.
- Launch new products
You can create additional products to attract more consumers and build the trust of existing ones. However, producing a new product requires adequate funds to purchase raw materials, invest in technology, etc., which you can finance via a business loan.
- Purchase bulk of inventory
If you wish to expand your business, you must buy inventories in a bulk quantity using a business loan. This will help you meet consumers’ increasing demands, earn profits and grow your business.
- Get the business of your competitors
One of the simple yet fastest ways to expand your business using a startup business loan is to purchase your peer’s business. It helps to minimise your competitors in the market. Besides, it also assists in developing a brand’s reputation and building customers’ portfolios.
- Clear your liabilities
Suppose you have obtained funds from private equity and feel their continued involvement in your company is hampering your business expansion. In that case, it is ideal to repay their money using the business loan amount and take complete ownership of your company.
- Build new infrastructure
Alongside your business expansion, infrastructural growth is essential to accommodate new employees or products. For instance, you may either need ample office space or a place to store inventories. Whatever your need is, borrowing a business loan from a financial institution after fulfilling its business loan eligibility parameters will help you to construct or buy a new commercial property space.
- Expand your business into a new location
You can grow your business by expanding its geographical coverage. This, however, does not mean renting a warehouse or building a new office. Instead, you can use the money from your borrowed business loan and place advertisements in relevant media in neighbouring towns and cities. This way, you can attract the target audience and expand your business in these areas.
- Sell on credit
If you are growing your business to a new location, one of the marketing strategies to build your brand over there is to sell your services or products on credit. However, this can negatively impact your company’s cash flow. To solve this issue, you can borrow a business loan to keep some cash in reserve to meet the operational expenses of your business.
- Improve your creditworthiness
Selected financial institutions offer business loans at nominal interest rates, which translates into affordable EMIs, and helps you to repay your loan on time. This significantly improves your credit score.
If you want an unsecured business loan or a startup business loan for your new company, first compare different loan offers on leading marketplaces like Bajaj MARKETS before applying. This will help you to select a suitable loan deal with flexible terms and conditions.
So, consider the abovementioned ways to use your business loan and expand your company. Additionally, make sure you check the business loan eligibility criteria before applying to avoid any hassles later.