Building blocks of success: Leveraging small business loans for sustainable growth

1 May 2024

Achieving sustainable growth takes adequate funding — and small business loans can be the ticket to success.

supporting new businesses

Small businesses often rely on lending services to maintain financial stability and achieve growth. 

In the UK, a Statista survey of 282 UK-based SMEs found that roughly 80% of respondents obtained financing of some kind from 2019 to 2022. The most common financing amount ranged between £25,000 to £99,999, with 26% of respondents borrowing in this range during 2022. 

Keeping up with your competitors can be easier when you invest in growth initiatives – and small business loans can be a great lending tool enabling you to compete.  

Leveraging small business loans to finance sustainable growth

After investing in the launch of your business, how can you ensure continual growth? 

Business growth is often gradual, requiring careful and detailed planning. In the case of businesses that experience overnight success, properly managing that growth can be an entirely different challenge that requires a stable cash flow for bigger investments or purchases. 

Small business loans help small businesses like yours unlock new opportunities for growth by providing a steady source of income during expansion initiatives. 

Take a look at the advantages of small business loans for financing business growth:

  • Enhanced operations: Expanding and upgrading your operations is the first step to creating a stable business infrastructure. Whether you are planning to increase production capacity, open a new location, or invest in new technology, small business loans can help you expedite your expansion efforts and fund projects in short timeframes. 

  • Product development: Developing new products and services plays a monumental role in keeping the interest of your customers and expanding into new markets. However, research and development processes take time and sufficient working capital. Small business loans ensure you have the financial flexibility to embrace innovative product development. 

  • Increased marketing: When introducing your brand and business to new audiences, you need professional marketing and sales materials to support your pitch. Effective marketing campaigns and ongoing content management can require significant working capital. With the help of a small business loan, you can allocate more funding to your marketing strategy. 

Key factors to consider before taking out a small business loan

Considering both the advantages and disadvantages of any lending product is essential.

Though small business loans come with many benefits for achieving growth, they also come with risks worth addressing before diving into the lending space. 

Here are three key factors to keep in when weighing your lending options:

  1. Repayment: Before committing to a lender, make sure you understand the repayment terms thoroughly, including your interest rates, repayment schedule, and penalties. 

  2. Business Continuity: Evaluate your business plan to ensure that the loan aligns with your long-term goals and objectives. Consider how the loan will contribute to your business’s growth and whether it’s the most suitable financing option available.

  3. Financial Stability: Determine your current level of financial stability before borrowing from a lender. If your credit score needs work, searching for bad credit business loan options can help you find lending tools that match your current financial needs. 

Funding Options by Tide connects you with UK lenders

If your small business operates in the UK, Funding Options by Tide can connect you with more than 120 lenders in the region. Through our brokerage platform, you can find loans ranging from £1000 to £20M, the exact amount your business will be eligible for is determined after availability checks and may vary business to business.

Get started with Funding Options by Tide

Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.

It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business and personal credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.

Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.

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