Tips for Business Growth With Growth Capital Loans

Are you trying to grow your small business into a large one? This takes money to invest in expanding your operations and bringing in new business. You may be able to secure that growth capital with a loan. Of course, navigating the world of business lending as a small business owner isn’t always easy. A little guidance can help you find the right options for your company.

Growth Vs. Working Capital

Are growth and working capital different? In short, yes. They may sound similar because they both provide you with money for running your business. However, growth loans are focused on helping you expand your operations. Conversely, working capital helps you ensure you have enough funds to cover all your short-term expenses.

Debt or Equity?

Many business owners choose to sell equity to raise capital for growth. However, this may not always be the right idea. Selling equity is a permanent decision. Your only option is to buy back shares if the investor is willing to sell. Conversely, taking on a loan is a temporary arrangement. In the end, you will retain all your current equity in the business.

Uses for a Growth Loan

When you take out a loan, you can use it to grow your business in a few different ways. Here are some examples:

  • Purchase equipment for your team
  • Hire new employees
  • Invest in marketing initiatives
  • Release a new product
  • Enter a new market
  • Buy real estate

Chances are that your growth strategy will include a combination of several of these options. You should know how you intend to use the money before you sign on the line. Not only will a clear goal make it easier to convince lenders to give you a loan, but it will also help guide your use of the funds.

Ways To Borrow

You can take out many different loans to help grow your business. These are some of the options:

  • Conventional business loan from a bank
  • SBA-backed growth loan
  • Asset-based loan
  • Alternative growth loan
  • Cash advance

Explore each of these options to determine which is the most favorable for your situation. Often, SBA loans will be the best terms. However, they take a long time and can be hard to qualify for. If you need something fast-moving, consider an alternative lender or a cash advance.

Learn More

Discover more about your options for growth capital loans. This could be the key to your business success.

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