If you’ve ever had personal loans, you know they can be very useful tools for personal use, whether you’re paying off an old debt, covering a large purchase, or just going on an impromptu shopping spree. But can they be used to help expand your business? Take a look at what you can do with personal loans.
When can a personal loan help you expand your business?
Depending on how large your business is, how long it’s been in operation for, and at what stage it is in its development, a personal loan may or may not help it out. Here are some of the cases where a personal loan is the right choice.
When you’re looking to expand little by little
A personal loan can be limiting in terms of what you can achieve with it, because of the amounts it makes available for borrowers. Depending on the lender, you can get from £1000 to around £25,000, which will not cover very large expenses, especially where business expenses are concerned.
That’s why this kind of financing solution can be ideal if you are looking to expand step by step, a little at a time.
Perhaps you want to start offering an additional service, or you want to enhance the product you are already offering. For example, if you’re running a coffee shop, you can buy a more expensive, higher quality brand of coffee, or sugar, milk, etc.
There are numerous places where this money can go to add to the value of your business, so think outside the box and spend the money accordingly.
When your business hasn’t technically opened yet
Even if your business isn’t officially “open” yet, that doesn’t mean you haven’t been working behind the scenes for months, spending money and investing in its future success. There are a thousand little things you can improve before the grand opening, and this is a special time when you still have a chance to add to your business in order to present an image as polished as possible.
But since your business hasn’t been operating yet, you have better chances of getting a personal loan than a business loan. So, use this money to add a modern counter, a couple more sofas, and perhaps some last-minute changes, like new aprons for the staff or any other thing that you think will contribute to your business’ success.
When you have small aspects to invest in
They say the devil is in the details, but so is success. Perfect, polished details can make the difference between your business and your competitor’s business, so make sure not to overlook the small aspects. Sure, teaspoons aren’t the most essential tool in your coffee shop, but higher quality ones that are properly polished can give you a higher end look than the ones you picked up in Poundland.
Similarly, things like a good coffee machine in the staff room can help boost employee morale, and a nice-smelling soap in the bathroom can make all of visitors feel cleaner.
Generally speaking, you can make a list of all of the little things you usually ignore, and every once in a while, you can get a little cash boost and tick something off the list, whether it’s new napkins or a nice, one-time bonus for your best employee. The little things can go a very long way.
When you have a one-time expense that can help you grow
It’s difficult for everyone to part with their money, but some investments are not only worth it, but entirely necessary if you want your business to grow. These investments are typically pretty pricy, but you need to treat them as one-time expenses that can take your business to the next level.
If that’s not covered in the usual budget, perhaps a personal loan can offer that little extra you need to be able to afford it.
Continuing with our coffee shop example, you may want to purchase a larger space in order to be able to properly expand, or maybe you need a set of updated furniture. Maybe you want to invest in some special Christmas blends or cups, and you need the cash now, in order to be able to see a return in later months.
A personal loan can be exactly the solution you need to give your business that extra little kick. Take advantage of the opportunity and invest in the future of your business.
All in all, personal loans can be an absolute godsend for your small business. No matter what you need to invest in, as long as it fits within the amounts offered, you can use that money to spend it on the expansion and improvement of your business. Further down the line, you will be very happy you decided to take the plunge and invest in your company’s success.
Further reading on personal loans
Looking for finance? SmallBusiness.co.uk is working in partnership with trusted lenders to find the best business funding deals. Find out more here.