Small and midsize enterprises (SMEs) usually have big plans to expand and take their business to new heights. However, cash flow can be unpredictable even for the most popular companies – and you may be reluctant to spend on growth until you’ve saved a certain amount.
Are your plans for growth stalled by the hassle of applying for a traditional loan or the stress of waiting to have enough savings? Consider getting a SME loan to fund your big ideas and business investments, offering you immediate access to cash. Keep reading to learn more about SME loans and how getting one may help your business grow.
8 Ways That A SME Loan May Help Your Business Grow
Some SME owners may choose to fund their business growth plans by getting a traditional loan. However, these measures come with hurdles like extra documentation, approval delays, or a lack of flexibility in repayment terms. Take a look at some of the ways you can use a SME loan instead to help your business grow while avoiding the disadvantages:
Promote Your Business With Marketing Strategies
With the sheer number of competitors out there, advertising measures are crucial to stand out. Here are some digital marketing measures you could spend SME loans on to reach a wider audience and attract more customers:
- Influencer marketing
- Product launch events and materials
- Branding and image design
- Main website development and optimisation
- Search engine optimisation (SEO)
- Pay-per-click (PPC) advertising
- Traditional advertising such as TV, newspaper, and radio ads
- Participation in trade shows and events
Invest In Hiring And Training Employees
A simple fact of business is that the more capital you can access, the more you’ll have to invest in your workforce. A SME loan can fund important employee-related investments, such as the cost of recruiting and training new employees.
This kind of loan may also cover expenses for instructing employees in programs or methods that improve productivity, such as CMR apps or data analytics sites. Not only can this extra funding help maintain a base level of competency, but it can also improve customer service in the long run and may drive more people to your business.
Improve Inventory Management
Managing your inventory is critical to your business growth, and you may need to get extra inventory during peak season or a sudden spike in customer demand.
You may want to take out a SME loan to quickly cover the cost of increasing your inventory level, or to take advantage of limited-time offers that lower the cost of inventory. This includes opportunities like bulk-buy sales or seasonal discounts.
Have Emergency Funds For Sudden Expenses
There will be times that you’ll face unexpected costs, such as rising expenses due to an economic downturn or a bill for replacing broken equipment. Because your budget will be stretched further to cover these expenses, you might be worried about having to put your expansion plans on hold.
But with a SME loan, you can have the financial resources to manage those fluctuations and keep growing. These loans are usually approved in far less time and require far less paperwork compared to a traditional loan from a bank or other lending institution. This gives you the quick injection of cash your business needs to pay for an immediate bill, helping you buy much-needed inventory or replace equipment right away.
Manage Cash Flow Gaps
Some months are better for business than others, and some customers may take time to pay for your products and services. But regardless of those pending invoices, you still have to keep providing services or stocking in-demand products.
You might want to consider getting a SME loan for better cash flow to manage daily operations, ensuring that you can buy inventory, manage payroll, and cover other business-related expenses.
Expand, Move, Or Renovate Your Business Premises
Do you want to move to a bigger space to serve more customers, or have you found a better location that attracts more potential customers? Even profitable businesses may hesitate to make that big step for their growth if they don’t have a safety net. After all, moving locations or opening new branches can be costly – and in the meantime, you still have to spend on ongoing business costs like utilities and inventory replenishment.
You can use a SME loan to fund that leap without dipping into your savings or worrying about cash flow. This capital can help you renovate an outdated space, move to a better area, or open a new location for higher sales volume.
Acquire Businesses And Diversify Offerings
Acquiring other businesses may help lower your SME’s operational costs, expand your market share, or help you diversify the services and products you offer. An example would be a local restaurant buying a bakery, or a retail store acquiring a motorcycle delivery service.
These strategic moves typically require a large investment that you may not have on hand, so consider getting a SME loan if you want to seize the chance to expand.
Access Capital Quickly And At Flexible Terms
Traditional loans have several hurdles that SMEs need to clear before they get the benefits of the borrowed amount. Usually, you’ll have to deal with the following:
- Limited repayment periods
- Specified amounts you can borrow
- Additional documentation to prove financial capacity for repayment and legitimacy of business operations
- Longer wait for a loan approval and release of funds
- Collateral for approval, such as a vehicle, inventory or property
If you have to cover a cost or make a downpayment ASAP, a traditional loan may not be approved and released in time. Consider getting a SME loan if you want immediate capital, as well as the flexibility to borrow exactly the amount you may need.
SME loans also typically allow you to set a shorter or longer repayment period, so you may opt to repay your loan faster or later depending on your situation.
Conclusion
Even the most successful SMEs can run into challenges that may keep them from growing, such as cash flow fluctuations or a seasonal operations lull. If you want quick access to funds for your business plans, consider getting a SME loan. An immediate cash infusion may be just the thing for advancing your enterprise.