How to Make the Most of Your Small Business Financing

This blog was last updated on January 25, 2021.

It may not come as a surprise to you that 61% of small businesses regularly struggle with cash flow, and with the impact of COVID-19 in 2020, we’ve seen that become an even more prevalent problem for many businesses. Whether the result of poor money management, costly unforeseen circumstances, or some other reason, businesses can find themselves in trying situations owing to a lack of liquid capital.

Small business financing can help. With the right plan and some hard work, you can find financing that allows you to not only to stay cash flow positive but also can improve your ROI. Yes, a business loan can help you to generate cash flow, which will allow you to generate wealth. Think of it this way: If you get a loan for $100,000, deploy those funds to acquire products, and then go on to sell the entire inventory for $140,000, then you can pay back the loan and net the difference as profit.

But once you’ve received the loan, what’s your next step? You need to make sure that you get every dollar of that loan working for you so that you can make the most of the loan. Read on for tips on how to make the most of your small business financing.

Great Ways to Use Your Small Business Financing

Buy New Equipment

You can generate financial benefits by using your small business financing to buy new equipment. Of course, the type of equipment you buy for your business will largely depend on the industry you’re in, but if you are strategic, your new equipment purchase could yield a variety of benefits. With upgraded equipment, you could expand your product line, increase operational efficiencies, or even help employees streamline their work.

Bridge the Expansion Gap

One of the realities for business owners is the possibility of having to wait for profits to roll in from sales. If your cash flow situation makes this sort of payment scenario a precarious balancing act, a small business loan can give you the financial support to weather late payment situations. Plus, with funds to bridge the gap, you can continue focusing on running your business.

Spruce Up Your Online Real Estate

If your digital brand could use some improvements, small business financing can help fund a digital overhaul. In this increasingly digital era, having an online presence is essential to running a successful business. Building and maintaining digital customer relationships could be a great way to invest in your business. For example, a refreshed website that’s optimized for mobile or even online transactions could help better serve your customers and even increase your profits in return.

Upgrade Your Location

Renovations or expansion strategies could also be a beneficial use of your small business financing. If you run a popular restaurant, perhaps you might decide to expand the dining area to accommodate customers more comfortably or to offer more options such as patio dining. Alternatively, if you own a service-based business such as a medical practice, you might consider using the funds to make general improvements to your waiting area such as updated furnishings or other cosmetic improvements.

Expand Your Business

Have you ever mulled over the possibility of expanding into new markets? Whether you run a flower shop, a professional services company, or a clothing store, small business financing could help you to open up a new store. Of course, you’ll want to conduct some market research to figure out the best areas to set up shop in, but if you choose wisely, your new location could pull in more revenue.

Stockpile Inventory

One of the most frustrating situations that businesses can face is not having enough inventory to satisfy consumer demand. So, consider using business financing to assemble a well-stocked inventory. This is particularly important when it comes to periods of the year when sales are typically higher than they are during other periods of the year. If you lack sufficient inventory, would-be customers may simply go to other retailers to get what they want.

There are several ways to ensure you get the most out of your small business financing. Whether you opt for a working capital loan or another financing option, the loan you receive can help support a variety of improvements so long as the funds are put directly back into the business¹.

If you’d like to learn about available financing options for your business, call Mulligan Funding at 855-326-3564!

The information shared is intended to be used for informational purposes only and you should independently research and verify.

Note: Prior to January 23, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.