How loans aid your business in strategic investing & financial stability

28 Mar 2024

Read this guide to find out how you can leverage business lending solutions for strategic investments and to help navigate off-peak seasons.

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When you’re low on funds, it’s hard to make strategic investments for your business. 

Not only that, but if you work in a business that deals with seasonal fluctuations in revenue, you could be struggling to make it through off-peak times without sufficient cash flow and working capital. 

So, how can your business use lending to overcome these challenges to achieve true financial resilience?

Let’s find out.

The value of business loans for strategic investments

Strategic investments help make long-term growth and operational resilience a reality.  

Whether you need to upgrade technology, acquire new assets like property or machinery, quickly increase inventory, or expand into new markets, you may need significant capital to achieve your large-scale goals. 

However, what happens when you don’t have adequate cash flow to make these investments? 

Borrowing funds from a lender acts as a strategic tool for many businesses. By leveraging different types of loans, you can pursue opportunities that may otherwise be out of reach due to financial constraints. 

Moreover, loans allow businesses to spread the cost of investment over time. 

Instead of depleting cash reserves or waiting until sufficient funds are available, business loans enable you to access the capital you need and repay it gradually. 

Overcoming seasonal variance with business loans

Many businesses experience seasonal fluctuations in demand, revenue, and cash flow. 

For instance, retailers often witness huge surges in sales during the holidays, while top tourism destinations typically depend greatly on summer revenue. 

Navigating seasonal variations requires careful financial planning, as fluctuations in sales and cash flow can significantly disrupt your operations if not properly managed. 

You can leverage loans to bridge gaps in your cash flow during the off-season, helping you stretch your peak-season revenue further. Loans also help fund major business improvements – like the strategic investments discussed before – during times of the year when you have fewer customer concerns. 

What types of business loans are best for strategic investments & seasonal variations? 

If you are new to business lending, you may wonder what types of loans are available to you.

Here’s an overview of some of the lending options for growing and seasonal businesses:

  • Business loans: Business loans provide funds to your business from a financial or lending institution. Business loans are a good option for increasing cash flow but can be risky if you’re uncertain of your ability to make repayments or if you have poor credit. 

  • Bridging loans: Bridging loans are designed to provide short-term funding until your business can secure a long-term financing solution. For instance, if you’re waiting on commercial mortgage funds, a bridging loan helps move the real estate transaction forward quickly.

  • Bad credit business loans: Bad credit business loans are intended specifically for businesses with poor credit scores who are struggling to find financing. While you should always consider the lending terms, a bad credit business loan can also help you improve your credit score, however, they often come with higher interest rates. 

What can you use business loans for? 

Loans can be used for a variety of reasons. Here are just a few of the most popular uses: 

  • Expansion and growth: Loans can facilitate strategic investments in business expansion, such as opening new locations, launching new product lines, or investing in technology upgrades. Businesses can use term loans or commercial mortgages to finance capital expenditures associated with expansion projects, spreading the cost over an extended period while reaping the benefits of increased revenue and market share.

  • Equipment financing: Businesses can use equipment financing loans to acquire or upgrade essential machinery, vehicles, or technology infrastructure. By financing equipment purchases, businesses can conserve working capital for other strategic initiatives while spreading the cost of equipment over its useful life.

  • Research and Development (R&D): Loans can support investments in research and development initiatives aimed at innovating products, improving processes, or entering new markets. Businesses can leverage loans or grants specifically designed to support R&D projects, enabling them to stay competitive and drive long-term growth through innovation.

  • Mergers and acquisitions: Loans can play a crucial role in funding mergers, acquisitions, or strategic partnerships that align with a business's growth objectives. Acquisition financing or bridge loans can provide the necessary capital to facilitate transactions, allowing businesses to capitalise on new partnerships, expand their market presence, or diversify their offerings.

  • Marketing and branding: Loans can be used to invest in marketing and branding initiatives aimed at enhancing brand awareness, customer engagement, and market positioning. Businesses can allocate funds towards advertising campaigns, website development, social media marketing, and other promotional activities to drive sales and build brand equity.

Find suitable lenders for your business with Funding Options by Tide

At Funding Options by Tide, our brokerage can connect you with more than 120 lenders for loans ranging between £1,000 to £20M. Plus, we provide you with expert lending support throughout the process, ensuring you find the loan and lending terms that suit your business needs.

Connect with lenders today

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 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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Funding Options

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Business Finance

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