Every business owner starts their adventure with ambitious plans for how they will expand their enterprise and dominate the market. But reality is often more sobering. The good news is that a successful expansion is possible if you choose the right financing solution. From commercial loans to government grants and everything in between, here’s how to take your business’s future into your own hands.
The first step: Assess your growth objectives
Before diving into all the various financing options available to you, make sure you have a clear understanding of your growth objectives. Review and refine your expansion plans, whether it involves opening new locations, investing in new technologies and assets, hiring additional staff, or upgrading your existing equipment.
A well-defined growth strategy will help you identify your exact funding requirements and determine the most suitable financing solution for your business.
Traditional business loans
One of the most common ways to finance a business expansion is through commercial lenders, such as those we work with here at Specter Finance. Established lenders, from banks to specialty and private lenders, offer various business loan options, including term loans, lines of credit and equipment financing.
To apply, you’ll need at minimum, a recent business bank statement and a copy of your ID (such as a Drivers Licence). With interest rates still on the rise, it’s important that you do your research to compare loan terms, rates and repayment timelines from a number of different lenders to find the best fit for your business. Be wary though – doing this on your own will negatively impact your credit file (as each lender will mark your file on enquiry). To avoid this, and save yourself a great deal of time, speak with a Commercial Broker. The team at Specter Finance are experts in this space, and can explore your options without hitting your credit file at all.
Invoice financing
If you are facing financial woes due to delayed payments from customers or seasonality, invoice and cash flow financing can help get you out of a tough spot – and even set you up for further growth.
Invoice financing gives you a percentage of the outstanding invoice amount upfront, reducing the gap between when you issue the invoice and when it’s paid. This type of financing can give you working capital to fund ongoing operations and support business growth.
Peer-to-peer lending
Peer-to-peer (P2P) lending platforms have gained popularity recently, and they may be an alternative financing option worth considering for small businesses. P2P lending connects borrowers directly with individual investors, bypassing traditional banks.
This streamlined approach can result in quicker loan approvals and access to funds. However, since it’s a relatively new lending solution, make sure you carefully review the terms and interest rates associated with P2P loans to ensure they align with your business’s repayment capabilities.
Equity financing
If you are open to sharing ownership of your business, equity financing can provide you with the necessary capital for growth. Be aware that this involves selling a portion of your business to investors in exchange for funding – usually venture capital (VC) firms and angel investors.
Because you will be ‘buying into’ new business partners, make sure you conduct thorough due diligence, seek legal advice and work with a commercial broker like Specter Finance to negotiate the most favourable terms before entering into an agreement.
Government-backed loans and grants
Federal, state and local government all understand the value that small to medium businesses (SMBs) bring to the economy. As such, they support business ventures through various loan programs and grants. Keep an eye on the government-backed Grants & Programs Finder as it’s updated regularly and can give you easy access to a range of financing solutions.
Securing government-backed loans and grants can be complex. Be prepared to put together a detailed proposal on how you’ll utilise the funds, if successful. You may prefer to engage a Grant Writer to assist you.
“Expanding your business requires careful planning and access to appropriate financing options,” says Robert Trevarrow, Managing Director of Specter Finance. “Partner with an experienced commercial broker – we can help you develop a robust financing strategy, which you can then use to fuel your business’s growth.”
No matter what type of commercial lending support you need, we can help you reach your business goals. Speak to the experts at Specter Finance or call 1300 306 394 today to get started.