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Reasons To Secure a Loan for Your Business

Reasons To Secure a Loan for Your Business

Startup loans are challenging to secure for any new business lacking maturity, especially if you are still in the incubation or concept stage. Even smaller startup businesses who require minimal office space, equipment or supplies can often require hundreds of thousands of dollars to launch their dream venture.

Most people can’t afford to start their business without securing a loan unless they are willing to give up an equity stake or take on an angel investor where they often require a 10% to 50% ownership stake in the business. 

Expansion Stage

Businesses in the expansion stage, as well as mature businesses looking to increase revenue and stay competitive, will need to broaden their products, services and offerings from time to time. No matter how you’re going to achieve your expansion goals, an installment loan can assist making the required investments to keep your products and services. Business loans are invaluable if you are looking at a pricey expansion plan which is necessary for almost all businesses to grow over time.

Recruitment

Hiring outstanding talent for your business costs a lot of money! Newly hired, skilled employees can of coursecannabis business recruitment yield higher profits and in turn assist with your expansion plans. When you are establishing a startup or running a micro business you will find yourself wearing a lot of hats. ‘Multitasking’ will take on an entirely new meaning. 

From establishing your brand to acquiring and assisting customers to web design to bookkeeping to managing employees (including payroll, taxes, and benefits) it can and will take a toll on you and your business if you don’t have the right employees in key positions. When you or your employees juggle too many tasks, it eliminates the required focus and quality to build your business efficiently. 

Investing in talented individuals will lead to an increase in revenue and assist with building the core foundation any successful business requires. Although taking out a loan to hire the right people can seem daunting, the right employees are a business’s greatest asset and they will, in turn, justify the expenses.

Inventory

Inventory can typically be one of the largest expenses for any business no matter the type or industry. Most businesses need to invest heavily in inventory before they see a return on investment. No matter what point of operations a business is in, it is common they need capital for the cost of inventory or to purchase raw goods. Having a stable and healthy supply of inventory enables any business to have ample product on hand to meet customer demands.

Moving locations / Construction Expenses

Moving personally is an expensive endeavor and that is especially true for your business. In addition to securing a new location, you have the added expenses of moving technology systems and equipment. If you aren’t financially prepared to complete the move it can threaten your financial stability in the following fiscal year. 

Many businesses are also looking to expand or enhance their current physical location with improvements and remodels. A commercial real estate or hard money loan can help cover the labor, materials and development expenses.

Equipment

Almost all businesses periodically require new equipment or have a need to upgrade their current equipment. If your current revenue and profits are tied up in operational expenses, a business loan can assist with upgrading your equipment and in turn yield greater profits.

A business loan is a popular method to finance equipment as these loans generally don’t require collateral in addition to the equipment itself. Purchasing equipment generally necessitates a business loan or in some instances, charging that expense on a business credit card depending on your credit limit. 

This type of loan and what you require will be dependent upon specifically what your company’s role in the industry is. Certain businesses will have a need for more expensive equipment to upgrade or purchase – farmers for example can take out equipment loans to produce a greater yield over the following year and the extra profits that are generated will facilitate a faster repayment of the loan. 

The difficulty is newer/updated models of equipment are constantly being produced and most companies have a constant need to upgrade. Fortunately for business owners, purchasing equipment is not the only option. Examine the differences between equipment leasing and equipment loans so you can make the correct decision to benefit your operation. At CannaBusiness Financing we offer both lending options.

Money-In-Register-DrawerCash Flow Boost

According to a study by US Bank, 82% of businesses fail due to poor cash management. To safeguard your business, you need to preserve cash flow (profits vs. expenses) which a business loan can facilitate during lean business cycles or during periods of overall economic uncertainty.

Partner Buyouts

Some partnerships in business just don’t work out, which facilitates a need to buy the ownership out from one partner. In many instances, although a partner may agree that this is the best solution, you won’t necessarily have the liquidity on hand to complete that transaction.

In these situations, securing a loan can allow you to execute and complete the buyout process smoothly. There isn’t a specific type of loan for partner buyouts, however, you can utilize most loan products to complete this transaction.

Acquisitions

One of the best ways for some businesses to expand can often be through strategic acquisitions.  When this type of opportunity presents itself, time is generally of the essence. It’s important to have access to the capital to acquire another business quickly. 

In addition to loans specifically for business acquisition purposes, CannaBusiness Financing unsecured loan proceeds can be used to cover part or all of the cost of acquiring another business in order to increase your market share.

Cover unexpected expenses

In business, as in life, there are always unexpected expenses.  To prevent your business from being derailed by these, CannaBusiness Financing offers many different loan products that can help get your business over a rough spot when the need arises. Contact our team to get started. 

 

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Posted by Canna Business Team


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In an industry that is constantly evolving, Canna Business Financing provides business owners with a reliable source to gather the most up-to-date information. From resources to fund the growth of your business to insights on best practices to scale, look no further!

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