Small business loans provide entrepreneurs with the money needed to enhance their business models in some manner. In fact, these loans can help poise a small operation to increase its revenues and become more profitable. While loans of this type can be obtained for just about any type of business related expense, here are a few that you should consider closely.

 

Launching a New Product

Your company has just developed a new good or service that has a lot of potential. Along with promoting the product with your current customers, the plan is to reach out into a few other targeted markets. That will mean spending some money on marketing and advertising.

 

The right business loan will give you the working capital needed to fund every aspect of that advertising campaign. Use the money to prepare sales collateral for use in direct mail pieces, print media advertising, and even radio and television spots. You can also allocate part of those funds to develop additional splash pages featuring that new product, complete with links back to your online store.

 

With the right financing, you can create a multi-layered ad campaign that will begin generating orders almost immediately. You may even find that from the very first month of the campaign that there is enough sales coming in to cover the cost of the loan payment. As the sales increase, that will just mean more money for your bottom line.

 

Upgrading Equipment

Every business, including smaller ones, relies on some type of equipment to operate. At the very least, you must have computer workstations, a reasonably versatile phone system, and some type of internal network to connect all the office computers. Don’t overlook the need to have desks, chairs, and other essentials that allow your employees to work in a secure and comfortable environment.

 

All these forms of office equipment become dated over time. If your small business has been up and running for a few years, there is a good chance that at least some of what you have needs updating. Rather than creating several new debts for furnishings, computers, and software programs, why not obtain a business loan and use the funds to purchase all those replacements at one time? You’ll only have the one new obligation to manage, and there is a good chance that the interest applied to the loan will be more competitive.

 

Renovation and Expansion

Your client base is growing quickly, and there is the need to add more production room and possibly hire new employees. A business loan is a great way to manage the up front expense of adding square footage to your facility. With that extra room, you’ll have more space to store finished goods while preparing to ship them to customers, additional room to rearrange the production line, and even some space that you can set aside for additional work stations when and as the need arises.

 

Boosting Your Inventory of Raw Materials

After bidding and winning a few new projects, there is the issue of being able to deliver the products in a timely manner. While your current inventory of raw materials will get you started, they are much less than needed to fill your existing orders and manage these new ones. Since you require a higher volume of materials to meet these short-term needs, why not consider using a business loan to purchase them?

 

Using the loan proceeds for these new and lucrative projects means that you still have open credit with your suppliers. That credit can be used to obtain more supplies to meet the needs of your more established clientele. Depending on the payment terms that are in place with those recently acquired clients, you could be able to retire the loan in six months or less. That would position you to obtain additional funding the next time there was a need for purchasing raw materials in greater volume than usual.

 

The responsible use of a business loan can be the springboard that helps propel your small business into a new era of profitability. Take the time today to look around and identify specific strategies that would help you grow the business, and determine what type of working capital you would need. From there, it is just a matter of working with AFN to obtain those funds, and then putting them to good use.