What Is Business Expansion Financing?

The old saying, you have to spend money to make money is never more true than when you are starting a business. As an entrepreneur who has started their own business, you pride yourself on taking care of that business. You want to make sure you are doing what is best for the business, your employees, and the management team. As you start to think about expanding the concept can be scary and expensive. But there are business expansion financing options available to you. They were created to help grow your business. After all, growing your business was probably one of your goals since the start.

Business expansion financing gives a business owner the ability to do things they may have been unable to do. These include buy additional office space, hire more staff, increase inventory, or acquire another small business. You can even expand your product offerings or buy a new office or factory.

We all know that money does not grow on trees and business expansion financing is not going to just be handed to you. There are a lot of factors that go into you deciding the type of financing you need. For example, you want to buy a new office building outright but know that by doing so you will be short on cash for your payroll. There are business expansion financing options for each business case. These options allow you to grow your business while still making sure you have the proper cash flow to keep the lights on.

So what types of business expansion financing are available?

Friends and Family

This can be one of the most stable sources of funding because they are going to have very few requirements. That is if they believe in you and this is the first time you are asking for money. If you are a reliable borrower, friends and family are often happy to loan to people they know. However, if you are known for going from one family member to the next asking for cash and never paying them back, at some point the answer will be no.

Banks Loans

A bank loan is a great low-interest rate option if you can be approved. Because of the new regulatory standards, a bank loan can be hard to come by. Only 20% of small business applicants are approved for a traditional bank loan. Your business must be in a perfect state of affairs to receive the funding from a traditional lender.

Alternative Lenders

The financial services industry is constantly changing. Long gone are the days that you only have one option to get funding from. The “FinTech” market as we call it is filled with financial services startups trying to make a name themselves. These startups are offering custom services to individuals and small businesses.

Alternative lenders can be a great way to acquire business expansion financing and should be considered. One alternative funding option is a merchant cash advance. This a great option for a business that is looking to take advantage of an opportunity to expand quickly. The application process is simple and can get you the funding you need in as little as three days. The requirements are also simple. We look for businesses that have been around for at least six months. As well as, businesses that generate over $10,000 a month in revenue. Over 90% of those who meet our minimum requirements are approved for a merchant cash advance.

Instead of a traditional fixed monthly payment, a merchant cash advance will take a daily fixed percentage of credit card sales. This will happen until the amount advanced has been paid off. The nice part about this process is it is automated so a business does not have to worry about receiving a late fee.

All of these options should be weighed against a business’ operational model. Because every business is different you have to find the right one for you. Your business is something to be proud of. And this decision can determine the financial future of your company.

Get Started

If you have questions about what the right business expansion financing option could be right for you, give us a call. Our goal is to see your business succeed!

Do I Qualify For Business Expansion Lending?

Running your own business is a dream come true for some. When you have a great idea that becomes a reality it is something to be proud of. Having the entrepreneurial spirit probably means you are looking to expand your business. Expanding your business can be expensive and most young businesses don’t have the capital outright to afford it. But that doesn’t mean you should miss out on the opportunity. Business expansion lending is an area of funding that has exploded over the last few years and could be right for you.

If you are ready to expand your small business and take it to the next level, we have options for you. Whether you have been operating for several years or are still in the startup stage, business expansion lending is available to you. As you are considering how you want to expand your business, you have to keep the current state of your business in mind. Your company’s financial future is at stake.

When choosing your business expansion lending method you should considering a few factors.

Is the expansion in your businesses best interest?

Sometimes it seems like a great idea to expand your business because the opportunity has presented its self. But is it really in your best interest? There are several questions you need to consider:

• Will you end up making the money you borrow back or will it just make your business look larger?
• Does the opportunity fit within your current business model?
• How will your customers react to the new expansion?

Depending on your industry, an expansion may or may not make sense but it is important to do a self-evaluation before making a final decision. You can consult some of your current customer base to see what they think. You can also talk to a business mentor. Ultimately, the decision will be yours but talking it through with others can often help!

How much will the expansion cost?

Knowing how much your expansion is going to cost going in, can be key for a traditional lender. A bank is going to ask you what your projected plan for the money is and how you plan to spend it all. Walking into your meeting with a lender you will feel more confident in asking for the business expansion lending if you have done your analysis ahead of time.

What does your business and personal credit look like?

A bank is going to want to know the state of your personal and business credit. They are also going to ask for your business partner’s credit history as well.

Before you apply for a loan, you should be prepared and know what your credit score is. You also need to make sure that you have a business credit history. If you have only been in business for a short period of time or have taken on a lot of business debt this score may be lower than a bank will accept.

Before you apply you want to make sure that you are portraying your company in a positive light. You only have one chance to make that first impression and you don’t want to blow it with a bad credit score. Being turned down by a bank is not a fun experience. Sadly, it is one that a lot of new businesses experience because they don’t understand their credit score.

Once you have made the decision to expand determining where to get the funding from can be another challenging question to answer. There are so many options out there. You will have to know if you qualify for a traditional bank loan or if you will look at an alternative lender as an option.

Getting Started

If you have made the decision to expand but the opportunity is time sensitive, you may want to consider a merchant cash advance. This option gets you the cash you need in just three days. And applying is simple! At eBusiness, we pride ourselves on wanting to see your business expand and thrive!