Coronavirus Business Interruption Loan Scheme (CBILS)  

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When you think of business loans what is your natural reaction? For many, the term ‘loan’ brings up negative connotations.

Many people believe that to succumb to lending means that you are not doing well financially, however, this outlook in the world of business is extremely detrimental to sustainability and growth. In this current (and arguably any) business climate, these concepts are so important.

There are many positive reasons as to why you might decide to borrow money, and the value you can gain through lending might significantly outweigh the reasons not to borrow.

Here, SWIG Finance’s Business Manager Nicola Mapp, outlines the most common reasons for business lending and how it can help;

  • You need to grow your team – hiring new employees is a high-cost exercise and if you do not have the required level of finance available you might put off hiring. The fact may be that you need more staff. By putting off your plans to grow your team, your business will suffer through lack of resource. Recruitment is a common reason to borrow money, and if you do it properly by investing time and money into the process, it is likely that you will discover candidates who will not only cover the costs of recruitment, but will help raise your business to another level.
  • You need to invest in stock – as the saying goes, you need to spend money to make money. Depending on your business, you might need to invest in stock – another common reason to apply for business finance. Whether you have just started out, or even if you are an established company creating new product offerings, the chances are that you will need to invest in assets, be it the products themselves or the raw materials, and allow for the time lag between these costs and realising a sale. Borrowing to invest in stock will give you piece of mind that you can fulfil orders and remain financially stable.
  • You need to invest in marketing – your products will not sell without market visibility. The width and breadth of marketing is vast. You may want to invest in a digital agency to boost your business profile, or you may be a ‘one-man-band’ who is bootstrapping – either way, without effective marketing you will not be able to reach new customers.
  • You need to relocate your business – perhaps your current premises are too small, or maybe you need to relocate to a another, more visible location (for example). Upfront costs of business premises are often high and without external finance this transition can be difficult. With the right external funding you can ensure your premises do not hinder your business’ opportunities.
  • You need to invest in machinery – maybe you have secured new contracts, or perhaps your machinery is outdated. Both of these scenarios could be reasons to invest – machinery is expensive, and the chances are that there is not enough ‘spare’ capital to cover the costs. But what if new machinery could improve efficiency and drive productivity? Investing in machinery can be a win-win situation.

The bottom line is that business lending, if planned properly, is a valuable tool to help businesses to grow.  However, it has to be affordable, fit with your business’ objectives and model.  This is why it is vital to produce financial forecasts.  They allow you, as a business owner, to make decisions that ensure the correct finance is targeted and sourced so that the investment(s) you make have the required impact.

At SWIG Finance, we recognise that many smaller businesses have viable plans but do not meet the credit criteria of their bank.

It is for this reason that alternative lenders, like SWIG Finance, exist. And anyway, wouldn’t you prefer to work with an organisation that is designed to create positive social impact? I know I would.

About SWIG Finance

SWIG Finance is the South West’s leading Community Development Financial Institution. We are passionate about bringing social and economic benefits to people and places in the South West.

We do this by providing support and finance to Startups and growing SMEs that can create and secure employment opportunities.

As the South West’s leading delivery partner for Start Up Loans UK, we can provide startup loans from £500 – £25,000. For more information visit https://www.swigfinance.co.uk/start-up-loans

We also have loans from £10,000 to £250,000 available to South West SMEs who cannot access sufficient funding from their bank https://www.swigfinance.co.uk/funds-available/

For an informal discussion about your funding requirements, get in touch with our friendly and professional team to find out how we can help: info@swigfinance.co.uk / 01872 227 932