If you assume that expanding your company will increase your bottom line drastically but not sure if it is worth the expense and hassle, do not worry. There is so much of help around. Consider rising factors businesses are expanding before making a final decision.
Then, check your options for moving forward and growing your company. Here are the key reasons for the companies to grow, which need extra capital resources.
- Marketing and Commercialization. Marketing investment is crucial to boost growth in the company.
- Whether you need a warehouse or office space to the house or your operations, a capital infusion is required for renting or purchasing a new space.
- Increase the number of Locations. If you are opening your second or tenth spot, you need to invest a great deal of money before having additional revenue flood in.
- Hiring New Employees. New staff allows you to expand the hours and increase the satisfaction of your customers.
Unless you have the capital to invest in growth you cannot develop. At first, that may seem strange. However, extra sales alone can increase profit. Since there is usually a time lag between the moment you need to invest in growth and the moment you get the resulting sales and profits, before you can grow, you need money.
Types of Expansion Financing
As you are looking for start-up funding, there are plenty of places to go when searching for Business Loans Singapore. As you have probably heard, only a few of those places are suitable for any given company. Choosing the right form of expansion funding is essentially a matter of matching the needs to the source constraints.
By partnering with professional investors, you’ll get the funds you need, plus expert guidance on many business-plan related matters. You may consider moving closer to the angel investors. Essentially these are people who can spend their money where they can earn better returns.
An angel investor can request partial ownership in your company in return for the investment it makes, or he may be satisfied with the debt repayment. Make sure to explain those issues in advance.
Another way of attracting investors is to turn to crowdfund websites. Crowdfunding is fun and can be an effective way to raise funds for your plan to grow your company! You just have to focus on your pitch and post it on the crowdfunding website.
Make sure your idea is quickly understood by others; after all, if you want them to finance your initiative, people need to know what you want to do.
The number one source of funding used by most small business owners is self-financing in the form of personal and family savings. It’s low-cost and has other benefits. For example, as you meet other sources of funding, such as banks and venture capitalists, they may want to know precisely how much of your own money you put into the company.
A personal line of credit, including credit cards, Home equity loans secured by your residence, Cash-value life insurance, Individual retirement account (IRA) funds, Internally Generated Funds, Friends and Family are the personal sources where you can expect money.
Lines of credit
In a small business, the most valuable form of loan is the line-of-credit loan. This kind of loan is very famous among the small businessmen of Singapore. Capitall make you avail of a short-term loan which extends the cash available in the checking account of your company to the upper limit of the loan agreement. You pay interest on the total estimated sum from the time it is estimated before it is refunded.
This kind of Business Loans Singapore is repaid with monthly payments equal for both principal and interest. Installment loans to satisfy all forms of business needs can be written down. When the contract is signed you obtain the full amount, and interest is measured from that date to the last day of the loan. If you repay an installment loan before the expiration date there will be no penalty and you can expect a fair interest adjustment.
Such loans require only the interest owed over the term of the loan, with a single “balloon” payment due on the last day of the principal. Balloon loans are also used in cases where a company is forced to wait until a certain date before a customer receives payment for its goods or services.
The unsecured loan will not have collateral guaranteed as a secondary source of payment. The lenders like Capitall offer you an unsecured loan because it finds you to be low risk.
A secured loan needs some form of collateral but has a lower interest rate than an unsecured loan in general. Typically, the collateral is connected to the intent of the loan; for example, if you borrow to buy a printing press, the press itself will likely act as collateral.