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Any business owner knows that money generates more money. The difficult part in determining how much money a company needs, is in planning how much money can be made through proper investment and asset allocation. It sounds complicated, and it is! Taking on additional financing is a challenging decision that requires anticipation and initiative for company growth; timing is everything. Here are a few ideal times to apply for additional capital:
GROWTH & EXPANSION
Business owners often overlook the importance of applying for a loan during the growth and expansion phase of the business, thus hindering their unmitigated success. At this time, companies feel financially secure with fresh, hefty sums of money as well as the anticipation of capital from verbally committed investors. Although it may seem counterintuitive, this is often the ideal time to apply for a business loan. Just like investors, creditors prefer to work with innovative companies who show a promising future. Applying for a loan before the business necessitates it, illustrates the initiative and planning that creditors are seeking, and often times results in lower interest rates. Remember, securing a small business loan may be difficult with the fluctuation of supply and demand, thus it is imperative to build a financial safety net for unanticipated occasions.
Cash flow is king when it comes to operating a successful business. Negative cash flow is frequently a result of poorly allocated asset management, and can result in forced purchase decisions at inopportune times. Cash flow complications often arise when a business is not consistent with their accounting methods—using both accrual and cash basis. Traditional business loans, factoring, and lines of credit are utilized to remedy these frequent cash flow discrepancies.
Employees can be a company’s main competitive advantage when it comes to modernism and the overall growth of a business. Funding enables the opportunity to attract new talent, thus allowing for continuous innovation and expansion. This talent may have a relatively high fixed cost in regards to training and payroll expenses, but the return is often paramount to the initial costs. Having access to additional capital allows the business to invest in the most vital asset—human capital.
LARGE ORDERS AND INVENTORIES
During the establishment phase, many businesses buy a significant amount of assets, such as property, real estate and equipment in order to generate sales revenue. However, original fixed costs are habitually the most difficult costs to cover. Access to additional capital may relieve a company of potential hindrances in regards to fixed or variable costs, in any stage of growth.
FIND OUT IF IT’S RIGHT FOR YOU
Here at Ultegra Business, we work with businesses in any stage of growth. Our team is equipped with a diverse set of financial knowledge and is happy to explore potential funding options, as well as answer any questions that may arise. Our unique one-on-one approach has allowed us to successfully offer loan approvals to over 90% of our applicants. If you’d like to learn more about Ultegra Business, give us a call at 1.888.893.6828 and speak with a loan advisor today, or apply online now. We look forward to helping you think outside the bank!