Running your own business can be hugely rewarding and lucrative, particularly as your business starts to grow. After working hard at college and achieving good grades, it is only natural that you want to enjoy a financially rewarding future and operating your own small business is a great way to do this. However, in order to continue reaping the rewards, you need to look at expanding your business as time goes on.
Of course, if you plan to expand your business, one of the things you need to consider is how you will raise the money to do this.
There are various options available when it comes to getting the cash you need for expansion, although the options that are open to you will depend on various factors such as your credit score and the turnover of the business amongst other things. Even if you are not planning to expand just yet, it is a good idea to know what your options are so that you are prepared for the future.
Some of the Key Options You Can Consider
So, what are the key options you can consider if you want to raise money to expand your small business?
1. Business loan
Well, if you have a decent credit score, one of the things you may be able to do is apply for a business loan. These loans provide stability and structure when it comes to repayments and you can get some good deals in terms of interest rates.
You will generally have to provide a detailed plan of your expansions if you are borrowing through a bank or other traditional lenders, so this is something that you should bear in mind.
2. Business credit card
Another option you may be able to look into is using a business credit card in order to pay for your business expansion. Again, your ability to get this type of finance can be affected by your credit score, so it is best to order a copy of your business and personal credit report before you start making applications. Also, it is worth bearing in mind that the interest rates on credit cards can be crippling if you only make small or minimum repayments on the balance. Therefore, if you cannot repay what you borrow on the card within the interest free period, you may want to consider a different option.
3. Secured loans
One of the other options you can look at is using your own assets in order to raise money to expand your business. For instance, if you are a homeowner, you may be able to get a secured loan, which enables you to borrow more money based on the equity in your home. However, you do need to remember that failing to repay the loan could mean your home is at risk, so be very careful if you are considering this option.
These are just some of the options you can consider if you want to expand your business and enjoy greater success.