When you start your business, you probably won’t have enough financial capital to make it without a loan. Luckily for you, there are loans specifically designed to help new businesses get running. Like any other loan, some terms and conditions accompany it, including stipulations on how you can spend the money. Here are a few things you should be using your business loan for.
Rent a Location
The first asset you need is a location for your business. Whether you will be interacting with your clients, storing products, or using office space, you need a location that is dedicated to your business needs. Securing your physical location is usually one of the first steps, and many businesses use their loans to put a down payment on a building or to pay rent. You can also use it to pay for utilities or other upkeep.
All businesses have equipment that keeps their operations going. Buying this equipment is not cheap, no matter what kind of business you are operating. If you are setting up an office, you will need office furniture, computers, a server and conference room furniture. If you are setting up a retail location, you will need display equipment, the point of sale devices, and storage for your products.
Even if you have the physical location and the equipment you need, you aren’t going to do well without inventory. Whether your inventory is a physical product or a service, you need funds to develop that inventory. While developing your inventory, don’t forget to figure out how to sell it. You need to put some effort into advertising and creating an online presence. You will also need to pay the employees you hire that manage and create your products, so don’t forget to set some money aside for that.
Expand Your Business
At some point, after you have had an extended period of success, you should start thinking about expansion. You can use the remainder of a small business administration loan to start a franchise and expand in different locations. You may even want to acquire a new loan at this point. However, the terms will be much better because you already have a proven track record of paying back your loans.
Make sure you use the money wisely to get started in your business endeavors. Remember to stay within the terms and to stay within your budget. You do have to pay the money back, so make decisions that will allow you to become solvent sooner rather than later.