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How Could Business Loans Help a Growing SME?

Reports by market research company BDRC Continental suggest that around 48 percent of small businesses consider themselves to be ‘permanent non-borrowers’, which means they do not anticipate applying for business loans in the future. However, business loans are consistently being cited as one of the most beneficial factors in terms of business growth, particularly lower-risk business loans including ‘alternative’ lending like invoice financing and peer-to-peer borrowing. So just how can business loans help a growing SME? Here are 3 of the primary advantages:

  • Workforce Expansion

    Around half of all British businesses plan to expand their workforce during 2015, according to research by the Confederation of British Industry. “Businesses are planning to create jobs in every region of the UK…and more and more of those jobs will be permanent. The outlook for young people is also looking brighter as firms look to boost their graduate intake and expand apprenticeships” says Katja Hall of the CBI. Access to appropriate business loans for workforce expansion has never been more important, and businesses are urged to explore financing options that meet requirements.

  • Profit Growth

    Business profits can be improved through a variety of strategies – most notably through a greater focus on marketing for brand awareness and visibility, through advanced office equipment and professional premises, and through raised prices that reflect an overall enhanced quality and service. A recent report by British innovation charity Nesta – and backed by research by the University of Cambridge – suggests that up to 63 percent of commercial peer-to-peer borrowers in the UK have successfully increased profits as the direct result of suitable and affordable business loans.

  • Increased Turnover

    The same Nesta report suggests that around 70 percent of businesses that receive funding through an equity crowdfunding scheme – one of the most popular types of alternative business loans – enjoy increased turnover. This can be reasonably attributed to an improved sales volume through greater sales training, streamlined internal processes, and an expanded capacity for businesses in the service industry. There are, of course, many advantages to an increased turnover, one of the most prominent being compulsory VAT registration which can have a significant impact on overall business profile.

As the economy continues to recover – the latest figures show a 0.7 percent GDP boost during the second quarter of 2015 – business loans are becoming a much more attractive option for businesses who have perhaps lacked confidence in the years since the financial crisis. Today’s business loans needn’t be a high risk endeavour, especially when choosing business loans with low interest rates. Small businesses can identify suitable lenders by using online comparison tools which make it quick and easy to see available deals. Compare business loans at today.