When it’s time to grow your company, there are a lot of options to choose from. Equipment financing offers and other single-purpose loans can help you get the equipment or acquire real estate needed for a second location, but they are designed for those singular purposes, so you won’t be able to get money for operational needs like new staff. Luckily, there are options for an expansion loan that is more versatile. They’re different from other multi-asset and multipurpose business loans because they are designed exclusively for companies with a proven success record.

Lending To Established Businesses

The biggest limiting factor in business lending is a risk. New companies and those with recent financial troubles present a big risk because most small businesses fail within a few years due to issues with competition, management, or mishaps that they do not have the reserve capital to weather. Once a company is firmly established with a predictable customer base, profitable history, and considerable cash reserves, lending money at low risk becomes easier.

This leads to expansion loan programs built to flex your needs. Some are multi-asset loans like startup loans that can only be used for tangible acquisitions. Other programs may offer operational loans that provide you with the working capital you can use on any part of the expansion. It might be helpful to apply for both if your company has the credit and income to handle both at once, so you can fully finance the cost of your expanded operation. That makes it easier to get a return on the investment because it puts you in the position of only needing to recover the down payment costs while sustaining enough new business to pay the additional overhead.

Lower Down Payments for Expansion Loans

One of the biggest advantages of finding an expansion financing program is the lower down payment requirements. Startup loans often require 20 to 30% down from an investor to get off the ground, even with limitations on how the money is spent. By contrast, expansion loans can have much lower down payments because your company’s financial history is now sound, and the likelihood of continued performance is high. That also means much lower interest rates when you do opt for a higher down payment, giving you options that are not available to new businesses. Keep that in mind as you decide what kind of loan suits your goals best.

Seek Expert Assistance

SBA financing is a great tool for business growth, but that’s not the only way it benefits your company. A small business loan can also help you shore up areas of your business that need help. By putting capital to work wisely, you can invest in things that make it easier for your company to weather any storms in the future. At BMF Advisors, we provide excellent loan terms that keep monthly payments low.