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Three Smart Reasons to Get a Business Loan

Shakespeare may have written that you should ‘neither a borrower nor a lender be’ but any business professional worth their salt will tell you that proper funding can be the difference between success and failure.

A business loan can provide the lifeblood of cash flow which can get a company over a rocky patch or help them get to a new level. The important thing, therefore, is to recognise when it’s the right time for your company to seek a business loan. The following are just three smart reasons why a company of any type might want to consider doing just that.

To Enhance Buying Power

Almost every type of company has to at least occasionally invest in either stock or equipment. When it comes to stock, seeking a business loan so that you can buy in greater bulk makes a great deal of sense.

Buying stock in greater bulk results in so-called economies of scale which dictate that the unit price of the stock will be lower, the more you buy. Your company’s profit margin on each unit, therefore, will improve and that can make a real difference to any firm’s ongoing financial health.

For most companies, purchasing plant or equipment is a less commonly required outlay of funds. Upgrading, improving or replacing such equipment, however, can often make a real difference to the efficiency of any company – especially one in the manufacturing sector. A business loan to facilitate the purchase of newer equipment to replace the old, therefore, can yield significant results in the longer term.

To Consolidate Existing Debt

If a company has a large number of previous loans or existing lines of credit, seeking one larger business loan to consolidate all of those can also be a very intelligent move. Doing so, after all, has the three-fold benefit of reducing the number of creditors needed to be dealt with, potentially decreasing the size of interest payments and providing other improvements to repayment terms.

Reducing the number of creditors who have to be satisfied means that businesses have more time to actually do business. Reducing the overall interest being paid on debt, meanwhile, means that the actual debt itself can be paid off more quickly. A better payment structure or improved terms, finally, can make it easier for a firm to meet repayment requirements whilst still functioning efficiently.

To Seize a New Opportunity

In business as in life, success is often down to timing. Certain commercial opportunities only come round once and if a firm misses out, it will generally not get another bite of the cherry. A perfect new property may hit the market, a supplier may offer a new deal if you buy in greater bulk or a commercial contract which requires an initial outlay of funds may come up for grabs.

In any of those aforementioned circumstances, a quick and almost immediate injection of finance might be required to secure a greater return down the road. Traditional bank loans are often too slow or inflexible to meet these needs, but customer-oriented lenders such as Boost Capital offer loans designed specifically for small businesses. Our loans are designed around your business needs and we can have the funds with you in just two days. That way, you can worry less about liquidity and focus on taking your business to the next level. Get in touch for an instant, no obligation quote or visit our blog for more insights into the industry

Speak to a member of our business loans team on 0800 138 9080

More businesses than ever before are looking to Boost Capital for their business financing needs. To learn more about how our UK small business loans work or to explore the business financing options that are available to you, contact us today!
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