What can a business loan be used for?
Any business can benefit from a small business loan, even those that have been established for a long time or have seen great growth. Think about it—you may be crushing it in terms of sales, but if you don’t have access to working capital to take your business to the next level, you might struggle to achieve the growth you want. A loan can help fuel your business operations and increase your profits, securing its long-term success.
Here are three ways small business owners have used loans to help their businesses thrive and grow.
1. Respond to opportunities
Your business probably encounters opportunities on a regular basis, such as the possibility of expanding your team, investing in inventory, or bidding on a contract. But have you ever missed out on an opportunity that could have really boosted your business’s growth, simply because you didn’t have the working capital available to take it? Investing in things like new equipment, new technology, or new hires can increase productivity, as well as give your business an edge against your competition
“I used my loan to purchase equipment for the Memphis Tennessee National Cemetery contract that we were just awarded … With this contract and our Pursuit loan, I’m now able to hire four new employees who will be stationed in Tennessee,” says Chris Dambach, founder of Industry Standard, USA LLC. “I’m also going to be able to bring a full-time executive manager onto my team in Syracuse, NY. This new hire will bring us to the next level and will help free up my time so that I can go out and sell our services.”
Butch Grimm, of Grimm Industries, turned to Pursuit when he wanted to boost the company’s chances of being awarded large national contracts. “Refinancing with an SBA 504 loan made a huge difference in our cash flow, reducing our monthly payments by $30,000,” says Butch. “We got a great interest rate and repayment terms that make it much easier to focus on reinvestment, too. And because we had significant working capital on hand, we were much more competitive when we bid for the licensed-products contracts. It worked out really well, strengthening our position and helping us grow.”
2. Buy a business location or expand your current space
A natural progression for many businesses is expansion, either through buying a new location or simply expanding the space you have. New branches, new areas of your business, new markets—these can all make a big difference to your profits, but not all businesses can afford the initial outlay without support.
Art entrepreneur Melissa Thurman outgrew her existing space just five years after starting her business and found a property that was ideal for her. “That part of my business’s expansion, actually purchasing a commercial property, was so brand new to me and outside of my comfort zone,” explains Melissa. “But the Pursuit team was great—they helped at every step. Overall, I’ve been extremely happy and I’d highly recommend that any entrepreneur who needs funding meet with Pursuit to find out what’s available and how they can help.”
3. Refinance debt
Regardless of how long your business has been running, you’re likely to have some existing business debt. Circumstances change, and your existing eligibility may well result in lower-cost loans than your earlier eligibility did. Refinancing existing debt can lower your monthly payments and free up cash that can be invested in other profitable growth strategies.
Take Healing Hands Massage and Wellness Center, LLC, an award-winning wellness center founded by Jennifer Burns. She approached Pursuit when she was looking to refinance the debt she took on when she originally bought her business premises. “Ashley [Heaton] and the Pursuit team have been terrific,” she says. “I had lots of questions and Ashley was always helpful and responsive and easy to work with. And my monthly payment was reduced by $1,600. Then the pandemic hit. Fortunately, since Healing Hands had already been approved for the working capital loan, we were able to use it for ongoing expenses during the four months that we were closed, as well as the costs related to reopening, which really added up.”
But what will a business loan actually cost?
Even if you know your business will benefit from a loan, you may be concerned that the cost will be prohibitive. Interest rates for small business loans vary, and the rate you’ll pay is determined by a number of factors, such as the type of loan or your creditworthiness.
The monthly interest and repayments are, of course, an important consideration when you’re thinking about taking out a loan, but there’s so much more to consider. A small business loan can unlock an incredible potential for growth, so think of it as a valuable investment into the future of your business.
These examples aren’t the only ways to use a loan—there are multiple possibilities. Think creatively about what your business needs to grow and expand. What would more working capital mean for your business?
You can find out more about how to apply for small business funding here.
