As a business owner, you know that capital is the driving force behind your business growth and expansion. But what if you don’t have capital sitting around ready to be spent? Then you might be in the market for a business loan. So, what exactly is a business loan?
What is a business loan?
A business loan is money you borrow from a bank or lender for business use that you will pay back in increments over an agreed period of time. A business loan gives you access to a large lump upfront sum and unlike other loans, the interest paid on a business loan is tax deductible.
What can I use a business loan for?
A business loan can be used for almost anything, just as long as it’s for business purposes. The loan can be either secured or unsecured (click here to find out what that means) and can have a fixed or variable interest rate. In simple terms, it’s very similar to a personal loan, but instead for business! Here are some common ways to use a business loan:
- Everyday expenses
Running a business isn’t cheap. You need to keep the lights on somehow, and a business loan can be a quick and easy way to cover those pesky (but necessary) day to day costs. Whether it’s paying your employees or covering the rent, a short term business loan can easily help to maintain your cash flow and get your business back on its feet.
- Buying inventory
You can also use a business loan to replenish stock, purchase new inventory, and even try out new products. A business loan gives business owners the opportunity to take advantage of discounts and they can use the loan to buy stock in bulk and at the best possible time. Up to date and good quality inventory keeps customers happy and improves your sales.
- Purchasing new equipment
New equipment often calls for a lot of money paid upfront. This is where a business loan comes into play. With the loan, you’ll be able to fund new equipment purchases at the drop of a hat. A business loan makes funding the cost of equipment purchases attainable to any business owner, giving you the opportunity to increase your operational efficiency and level up your business.
- A new website
In our new digital age, not having a functional website is considered a crime against humanity (we’re only kidding). Any and all businesses will benefit from refreshing their existing website, pun intended. A good website improves brand perception and increases traffic which often leads to more conversions. But at what cost? Luckily, with a business loan, you can cover the costs of website development and have your new site up and running in no time.
- Refinancing your debts
A business loan gives you the opportunity to refinance any existing debts you already have. If you’re in a costly situation, you can instead consolidate your debt to be more favourable, making it easier to manage your repayments. However, make sure you double check that the new loan won’t be costing you more than before with higher interest rates or fees. Feel free to use our AI comparison tool to compare your potential loan options to ensure you choose the right loan for your business.
How do I get a business loan?
Now that we’ve covered the different ways to use a business loan, onto the easy part, applying for one! Our trusty artificial intelligence comparison tool will mine through mountains of data to find the best business loan specific to your company’s financial needs. Simply enter in your details (don’t forget to mention it’s for business use), and voilá, you’ll be instantly given access to hundreds of financial products for you to choose from. Press the button below to find the right options for your business needs.