Businesses flourish basis the optimal financial support. Particularly at an initial stage, a small business requires easy flow of funds to develop and expand. One of the easiest ways to obtain business funding is by Applying for Small Business Loan. The major barrier for micro units to avail loans from banks/financial institutions is the lack of collateral or loan security. To overcome this barrier there are various government schemes introduced to help micro units get financial support without collateral.
In the initial stage every small decision can impact the business. Even small amount of money utilised in the right way can influence the business in a very positive way. The best ways to utilise the funds towards business development is enunciated below:
#1. Investin tools and equipment necessary for the business
Tools suitable to run a specific business is very much necessary. Investing in such tools is required to perform tasks accurately and efficiently.
Invest in new and updated software to reduce the time required to perform tasks. Although the cost of paid software could be high, profit earned by investing in them could be remarkable at the same time!
It is thus prudent to apply for a business loan to purchase the required software.If the business is product based, then relevant machinery with modern technology is very much required to manufacture the product. Always, reducing the overheads should be the main aim in running a business to earn more profit and further expand the business.
One should always look at automating the processes and make use of state-of-art technology to manufacture quality products which will earn demand in the market. With required funding via business loan, investing in machinery could be a really smart move.
Manufacturing quality products is not the only key to a successful business. You need to invest in world class marketing of products at the same time. Product should be well introduced in the market to draw attention of the consumers.Sales of the product will boost up only if the product is popular in the market. Advertisement of products and services off-line and online is one way of marketing. You also need tohire sales executives who are well versed in marketing of your business. Investing a part of the Business Loan for marketing will increase the visibility of your brand in the market, resulting in higher returns on investment.
#3. Skilled Labour
Good business strategy involves more than installing state of art machinery to manufacture quality products. Skilled manpower is also required to use the technology. Investing in skilled labour means higher overheads. However, this investment could be a prudent one.
#4.Develop a website
In this digital age, the best way to make the presence of the business globally is by developing an attractive website. It gives worldwide access to your business. Creating a website and keeping it updates doesn’t need a huge investment. You must certainly spend to expand your business’ presence online.
You can use the funds to replenish the inventory and add new stock on time.
#6. Seminars and Trade Shows
Seminars and Trade Shows are a gateway to improve knowledge about things happening around. In this era of technology, there are new updates every day. One has to launch products suiting the present trend. Awareness of the changing trend is required to launch new products. Such innovation from time to time will help in boosting sales of the products. To get knowledge about the trends, one has to attend seminars and trade shows. Investing a portion of the loan for such awareness is worthwhile.
#7. Operational expenses
Any business would require funds for day-to-day non-manufacturingexpenses like on travel, rent, tax, employee benefits etc. Small business loans come handy for these operational expenses.
Let’s further explore the types of Small Business Loans available in the marketing with the example of one of the popular private banks, Standard Chartered Business Loan.
Standard Chartered Bank offers an array of small business credit products at competitive rate of interest and flexible repayment schemes.
#1. Working capital loan
This works very efficiently for those firms, which do not have funds for their short term operational needs. These are running loans and the money credited to the loan account will be available for utilisation further. If used judiciously, it works very well, as interest is charged only to the extent of utilisation.
#2. Bill discounting
In many businesses, bill raised for any sales made becomes realisable on a later date depending on the terms of payment stipulated. Funds will be made available by the banks/financial institutions by discounting such bills at a value lesser than the bill amount. The amount becomes repayable to the bank on realisation of the bill.
#3. Term Loan
Business Loans can be availed for purchasing equipment, vehicles etc., by hypothecating the assets created out of the loan. They have flexible repayment period. Term loans can also be used for purchasing standard medical equipment like x-ray machines, colour doppler, MRI, CT scanner etc., which will help expand business of the medical establishments.
Even before one avails a small business loan the strategic way of utilising the funds should be drawn. The available funds should not be used at a one go. Funds should be very diligently used. Else, lack of funds could hamper business expansion and that is not the goal. Expansions are bound to happen in the business which means wider range of products, increased marketing cost, increased overheads, for all of which the small business loan will come handy.