Close your eyes and picture an extra $250,000 in your business’s bank account.
What could you do for your business with that money? Buy a badly-needed piece of equipment. Hire your dream employee. Produce a local TV commercial. All of the above!
However you decide to invest in your business, a term loan could make your plans come true. Overwhelmed by the possibilities? Here are six ways you can use a term loan to grow your business:
Few things are more frustrating than not being able to keep up with demand for your product. You miss out on a chance to rake in more profit, and more importantly, you risk disappointing your loyal customers.
As the 2015 holiday season approached, Ryan and Brittany of Dream Beard experienced this dilemma firsthand. After evolving their business to include a number of hair, beard, and body products, they realized they’d lose out on sales if they couldn’t purchase more inventory. “We create so many different products now that we often have to buy in bulk — and we don’t always have financing to purchase that much in advance.”
They ended up using a $25,000 loan from Funding Circle to buy enough inventory to get through the holiday season and even launch a new product. “[The loan] gave us freedom to do exactly what we wanted to do with the business,” Ryan explained happily.
If you could cut your interest rate in half, would you? If you’re using a credit card or merchant cash advance to fund your business, you could be paying more interest than you have to. As of August 2017, the average business credit card comes with a 15.37% APR, while MCA rates typically range from about 40% to 350%.
Term loans can be a great option to refinance your high-interest debt. In 2016, Ron Schott of Ace Media Productions was able to cut his interest expense in half by securing a loan from Funding Circle with a rate of just 8.99%. This has given him the opportunity to put more of his hard-earned dollars back into his company — “that’s real dollars that’s not going out.”
For many, the holidays are a special time to spend with loved ones. If you own a retail business, though, you know that the holidays bring tidings of great … stress. Of course, you have the potential to ramp up earnings, but that’s only if you can keep up with the influx of shoppers. All it takes is one long line or bad customer service experience to turn someone having a holly jolly Christmas into the Grinch.
In the fall of 2014, Ryan Gray, founder of Electric Brewing Supply, ran into this very issue. His company sells products to home brewers, and demand just kept growing: “Around the holiday season, three to four people doesn’t cut it anymore. Around Christmas, we have to hire seasonal help.”
With much of his money tied up in various deposits, he turned to Funding Circle for a $45,000 loan. Using this money, he and his wife were able to hire seasonal help and secure the inventory they needed to successfully ride the holiday wave. Ale’s well that ends well!
You don’t need to shop at Costco to know that things usually cost less if you buy them in bulk. However, in order to score the savings, you need to have the money upfront.
“If we don’t have enough cash on hand, we have to purchase items after the price increases — and that’s a big hit to our bottom line.”
This was the frustrating situation Koshland Pharm found itself in in 2016. Its supplier would increase prices every year, and Peter, the founder, needed to find a way to get a little more cash so he could save money over the course of the following year.
Peter ended up getting a loan from Funding Circle, saving him a ton of money. “With drug prices going up exponentially, we estimate that loan from Funding Circle saved us $20,000 to $30,000 over the course of [a] year … even with the interest we paid on the loan.”
In a perfect world, you wouldn’t need to spend any money on marketing. We can’t all be Tesla, though.
With a $50,000 loan from Funding Circle and a “it takes money to make money” mindset, Viola of Maika Goods was able to invest in multiple creative social media and email marketing campaigns. Today, her home and travel goods can be found nationwide at Barney’s, The Container Store, Urban Outfitters, and more.
Growing your business is a good thing. But growing pains got their name for a reason. What are you supposed to do when your pockets aren’t deep enough to cover the down payment for a new office space?
Skot Curruth of Philosophie Group ran into this problem in mid-2016: “Our New York office continued to grow, and we just could not operate anymore … it was bursting at the seams.”
Fortunately, Funding Circle happened to send a letter the same day Philosophie found a perfect new office space. Working quickly, they were soon approved for a $300,000 loan, which they used to secure their new office.
Have a dream for your business? We’re here for you. Apply for a term loan today.