Category Archives: Seasonal Business

6 Ways a Loan can Help Your Business Grow in the New Year

A new year for many businesses marks a new beginning or a new season. While in some cases it may just be a psychologically influencing factor, in many cases, it actually makes a seasonal and financial impact. As the new year dawns in and as a lot of businesses rise through turbulent times, to get back into their stride, we discuss easy ways in which a loan or a business financing plan can help steer a business towards success. As you read on, you shall find 6 practical ways in which a loan can help your business grow in the coming new year. But first, we shall delve into why a loan could be good for your business in the first place.

6 Ways a Loan can Help Your Business Grow in the New Year

Why Choose a Loan for Your Business

A business loan can serve many needs at various stages. In some way or the other, most businesses use loans for one or more of these:

  • Starting a business
  • Funding growth
  • Sustaining a business

Typically, businesses tend to procure such funding, or loans for purposes like:

  • Equipment rentals, purchases and maintenance
  • Manpower hiring and salaries
  • Paying utility bills
  • Paying real estate expenses
  • Purchasing inventories
  • Maintaining healthy cash flow
  • Managing emergency expenses
  • Insuring the business and/or employees
  • Investing in marketing and sales
  • Managing expenses related to outsourcing
  • Expanding operations
  • Diversifying the business
  • Acquiring another business
  • Credit consolidation

Oftentimes in business, it takes money to make money. Loans today serve as a reliable way to procure money when needed and many businesses fuel their growth in practical ways using loaned funds. Here are 6 ways which are virtually universal and applicable to perhaps every business that exists.

1. Transitioning into Profitability

Turning a business into a profit is not always very simple. It may be that a business is in its early days, is facing a low season or has turned into a loss-making one. But turning profitable can take a combination of many things going right. One of the key things, can be the supply of enough money and for this, a loan can be one reliable source as long as a business is eligible for it. Yes, loans have costs associated with them, but many businesses profit significantly beyond the costs of a loan, using the funds borrowed. Some investments of loans that often lead to profitability include:

  • Marketing expenses
  • Efficient cash flow management
  • Supply chain management
  • Logistics management
  • Distribution management
  • Business acquisitions
  • Inventory procurement
  • Market investments

2. Helping with Equipment Hire and Maintenance

Equipment often is the key to business success – virtually every industry can stand as a testament to this truth. Being able to afford the right equipment can be absolutely crucial in the growth of a business. Many businesses today use loans and funding solutions in order to be able to afford hiring and maintaining the right equipment for their operational needs.

3.  Managing Cash and Capital

One of the most important factors that keeps a business going and growing, is the effective management of cash and capital flow. Cash can be critical at almost any time in the life of a business. Oftentimes, challenges and turmoiled times can pose threat to the cash flow of a business and should anything go wrong, a downward spiral can easily be the result. On the other hand, efficient cash management turns many less profitable businesses into more profitable ones. Loans can help temporarily add cash to the rotation and the right timing of such an action can be worthwhile for a business in many situations.

4. Acquiring the Right Businesses

One of the most crucial moves in the journey of a business, can be an acquisition. Acquiring the right business at the right time and at the right value, can have virtually unmatched consequences and can be a strategic decision like none other. However, using the funds available with your business may not always be a good idea or even feasible, when it comes to an acquisition.

Debt is an instrument often used for business acquisitions and there are many reasons behind this:

  • Debt can help keep the cash flow undeterred
  • It can allow a business to acquire an otherwise unfeasible acquisition
  • It can help keep the acquired business healthy in its capital and cash availability
  • Sometimes, it can help secure the acquisition deal itself.

Hence, most businesses today take advantage of debt in the form of loans for acquiring other businesses that are seen as key to their journey.

5. Marketing and Promotions

Largely considered amongst the potentially most powerful investments toward the growth of a business, marketing and promotions are also probably the most valuable ways in which a business can use a loan. It can safely be said that the best use of business loans in recent times – in terms of return per borrowed dollar – is indeed marketing and promotions. Many businesses that invest well towards the right marketing moves or partners, often reap great benefits, which are often unmatched by the return on any other investment. Many of the world’s largest businesses have reached where they are, largely thanks to a combination of right marketing moves. Loans can help provide the funds it takes to get the right marketing and promotion going.

6. Diversification

Considered by many business experts as the best way to ensure lasting success, business diversification can help grow a business while also reducing risk in the business. Diversification can be across multiple market segments, industries, locations, distribution channels and more. Businesses with higher diversification are often well-protected from threats caused by seasonality, market trends, catastrophes, and so on. Diversification is likely to require funds and loans are often used by businesses when investing in diversifying their products, services, markets and industries.

Christmas and Business Loans – How to Make the Best

Business and Christmas have had a lot to do with one-another. This is best shown by some of the famous impacts that they’ve had upon one-another, like:

  • The big red suit of the modern Santa Claus figure that was developed by Coca Cola for it’s promotions
  • The 30 million odd Christmas trees that sell each year in the US alone
  • The fact that only 1 out of every 3 Christmas cards sold in the US has a religious message
  • Credit cards see a jump of over 3-times the typical usage on days close to Christmas.

As most businesses see a sharp rise during the season, there are some that see almost no change and some that see a slowdown. In either case, a business loan can be a tool at one’s disposal, that can help sail through Christmas, serving to address financial needs that a business may have.

How Businesses Typically Use Christmas Loans

Christmas loans are typically taken out by businesses that are either positively or negatively impacted by Christmas, and this is no new trend. Loans for Christmas seasons have been offered by lenders for decades, but it’s only now that there is a shift in focus from an unorganized form of lending to an organized one as the demand grows and as various state and federal regulations help make lending safer.

Christmas and Business Loans

Typically, businesses tend to use Christmas loans for purposes like:

  • Stocking up inventories
  • Strategizing and implementing marketing plans
  • Advertising and promotions
  • Renovation and refurbishment
  • Rending added spaces or equipment
  • Hiring temporary staff
  • Distributing gifts
  • Thematic décor
  • Launching new products or services
  • Procure added materials, permissions, etc.
  • Sustain through a period of slow business
  • Manage credit more efficiently
  • Manage working capital needs
  • Manage emergency purchases and other emergency expenses

Businesses of all kinds may be eligible for a Christmas business loan, and in today’s market, there is no need for a fixed purpose of a loan, considering that many alternative lenders allow loans to be used flexibly once approved.

Does Your Business Need a Christmas Loan?

A few factors can help you determine whether or not your business needs a Christmas loan. Here are some signs that can help:

  1. Previous years’ performance: If in the past, there was a performance that indicated the need for added inventories, equipment, etc beyond what your available funds can cover for, there is likely to be a use for a loan to manage the expenses.
  2. Forecasts: If your forecasts indicate a requirement that your cash reserves may not be able to cover, a loan could be useful.
  3. Financial situation: If your business is not in a financial position to smoothly deliver all customers their Christmas expectations, a loan could be the way to go.
  4. Inventory and equipment needs: The most important things to consider while looking forward to a season of change in demand, is the inventory and equipment. Loans are often utilized towards managing expenses on these items.
  5. Potential for marketing: Marketing and related expenses can serve as an invaluable tool when it comes to making the best of a season. Typically, loans invested in marketing at the right time tend to provide the best returns.
  6. Other factors: Many other factors such as manpower needs, working capital needs, cash capital availability requirements etc. can govern whether or not your business needs a loan for Christmas.

Can an Unsecured Loan from an Alternative Lender be the Answer?

At Business Advance Funding, we are an alternative lender and we provide loans that are:

  • Quick to procure
  • Easy to qualify for
  • Easy to apply for
  • Reliable
  • Available to bad credit borrowers
  •  Unsecured i.e. require no collateral

Typically, a traditional business loan would require you to guarantee repayment against a valued asset (collateral). Such loans can be slow at getting approved as determining the value of assets can take time. Furthermore, the chances of approval of traditional loans aren’t always high, while a loan from us comes with a rate of approval of above 90%.

Hence, many businesses choose our unsecured loans for their Christmas needs, considering the benefits that we provide.

Growth in Revenue vs. the Cost of Loans

When understanding loans and their value for a business, one of the key factors that needs to be considered, is the comparison in the potential growth in revenue that’s forecasted to be a result of the loan, versus the cost of the loan itself.

Typically, this is done via the process of business forecasting. Many businesses make two forecasts – say ‘A’ & ‘B’, where ‘A’ is the forecast with the loan and ‘B’ is that without. Let’s say ‘I’ is the cost incurred for the loan. If A-B>I, it is likely that opting for the loan is a good idea. This method typically works for businesses that tend to see a rise during the Christmas season, and doesn’t necessarily bear validity for those that don’t.

Five Great Ways to Utilize the Loaned Money

Loans can be used in an efficient manner, but also in a very inefficient manner. Offering you loans for your business, we also feel it is a part of our responsibility to offer you friendly advice, so if you’re rather new to business loans, here are five great ways in which your business could utilize loaned money this Christmas season:

  1. Purchasing inventory: Christmas brings a rise in demand for purchases for many businesses across many industries. The rise in demand that your business incurs, can be well-met when you’ve stocked up well enough.
  2. Purchasing/hiring equipment: A rise in demand may also mean a rise in the need for equipment. This can mean purchases or hires and loans can cover both, depending upon the source of your loan.
  3. Day-to-day expenses: Working capital loans are a great solution for such needs where day-to-day expenses are to be addressed.
  4. Marketing and promotions: When there’s potential that is to be tapped, nothing can beat the value of effective marketing and promotions and loans are often used towards such expenses.
  5. Hiring staff: Manpower is indeed an invaluable asset and Christmas can be the time one truly realizes this. A loan can help your business with the funds needed to hire added manpower during the season.

Get a Christmas Loan for Your Business

Having thrown light on some interesting facts about Christmas and business and having shared how business loans for Christmas could make a difference to your business, it is time for us to offer you our Christmas business loan. Featuring a simplified application system, easy qualification terms, quick processing system and a transparent offer, each Christmas loan from Business Advance Funding is designed to suit the borrowing business’ needs. The application process starts as soon as you fill and submit our online form. Shortly after, a customer service expert from our team shall connect with you, to assess your eligibility and requirements, and work towards a suitable loan offer for your business. We wish you a Merry Christmas and lots of luck ahead!

Flexible Budgeting can help you compensate for business seasonality

Ups and downs in cash flow are inevitable to any business and thus many businesses experience seasonality when structuring their budget. This could be due to diverse reasons. Based on the type of industry and the customers’ behavior trend, a firm may be full of activity in the spring, summer, fall and lag with the advent of winter, leading to modest to drastic variations in net income. As a result, ensuring sufficient cash flow throughout becomes a challenging affair.

Seasonal business financing budget

Determining seasonal business’s vital requirements is the key – A good look at monthly recurring fixed expenses and other likely variable and semi-variable overheads gives an unambiguous picture of necessary expenses such as inventory, payroll, rent, taxes, insurance, loan payments, you will need to cater to each month. Thus, a careful assessment and creation of a baseline budget can help you encounter unpredictable demands of your seasonal business with ease.

Planning for the whole year in advance makes sense – Repeated patterns in cash flow are uncommon occurrences to seasonal businesses and hence forecasting at once is important. Reviewing seasonal business performance month over month is elaborative and hence offers no accuracy. However, advanced budgeting not only helps you measure your small business more effectively but also assists you in saving during busy season.

Getting a seasonal business financing might help – Seasonal business loans can help you address short-term requirements of a seasonal business effectively. However, obtaining a seasonal business loan from a bank is not easy, given the strict loan requirements and lengthy procedures. There are other business funding alternatives such as business cash advance from direct lenders online that offer you funds with minimum documentation and no personal collateral requirements. They assist you in handling and planning cash flow through high and low sales seasons.

Following a budget plan helps you to spend your income the best way – It is an honest practice to be cautious during busy seasons of business. Being practical and keeping your expenses confined to your intended budget can extend additional buffering in times of slower business period. Doing so, not only defends your small business from the impact of seasonality or off-season, but also allows time for exploring smarter ways to spend on business.

Building alternative budgets helps your business prepare for any business situation – Flexibility in budget or having alternative budgets with built-in scenarios can offer you a room to gear up for business seasonality. If plan A, the baseline budget, details on basic fixed and varying costs, Plan B should be dedicated to how you will spend when you have excess and Plan C should help you set aside for the rainy day, meaning when your business underperforms.

Having a practical approach towards slow business can be useful – Slow business season is not that depressing, as it may seem. With a sensible plan in place, you can easily turn it into an opportunity to get ahead and grow your business. Keeping your costs to minimum is good; however, realize that making rapid budget cuts is not the solution. If you want to reap rich in busy season, try to spend more preparing for slow season by engaging with buyers, negotiating with sellers, instilling customer loyalty, etc.