We’ve all heard the axiom “it takes money to make money” more times than we can remember – and we know that it’s as true today as it ever was. However, there’s an application of this wisdom that some business owners exploit more effectively than others, and that’s in the area of their business capacity.
That is, some business owners grasp that “it takes money to make money” is not just about making purchases (e.g. inventory) in response to increased customer demand. On a more fundamental level, it’s also increasing a business’s capacity to get to the next level.
Simply put, unlike conventional bank business loans, working capital loans are investment vehicles that enable business owners to make purchases that put them a position to generate exponentially higher sales and profits; and often sooner rather than later. But unlike equity financing, they don’t give up an equity position in your company.
Below, we highlight some of the ways that working capital loans build business capacity:
- Add New Product & Service Lines
Instead of increasing existing offerings (which is always a possibility), businesses can use working capital loans to add new product and service lines that can help increase existing customer value, as well as attract new customers.
- Add New Staff
Many business owners are pleasantly surprised to learn that they can use working capital loans to hire new staff, such as experts and specialists. These valuable additions to their workforce help them win more business; especially if they’re submitting proposals, since “capacity of the business to deliver” is invariably a major consideration and a primary criterion.
- Open New Locations
Working capital loans can be used to open new locations, which not only increases visibility and expands coverage/service areas, but also spreads out risk and enables economies of scale. Business owners who wait until they have the capital to expand often find that the fateful day never comes. However, those who get a working capital loan can be opening the door of the new location(s) within weeks.
- Add New Technology
New technology, such as inventory management or accounts receivable systems, can instantly increase a business’s capacity to “do more with less”. What’s more, these investments invariably achieve cost efficiencies, which means that achieving ROI is usually done in weeks and months, rather than years.
The Bottom Line
Debt financing from a bank is always an option, but as most of us know, very few applications are approved. As you can see, working capital loans can – and frankly, should – be used to help a business increase its capacity to succeed. After all, it takes money to make money.
Call Mulligan Funding at 855-326-3564 to discuss your financing options today!
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.