Congratulations your loan request has been approved and no doubt you intend to use your newly acquired funds to achieve your business dreams, make changes and continue growing. The problem of financial restriction has been solved. Now, there are a million opportunities that the fund represents but the most important thing is to make the loan work for your business.

It is important to note that getting a loan from any finance company is one thing and putting the loan into proper usage is another thing. So before using funds from your business loan, consider how you will spend it and work out what will be best for your business. You can also consider getting expert advice and even work out cash flow projections to ensure that you are making the most of the loan.

How then do I make my loan work for my business?

Before a loan can work for you or your business you need to have identified the needs or the purpose of the loan. This is because it is always said that when the purpose of something is unknown abuse is inevitable. Any traces of abuse in terms of loan usage can be catastrophic for your business as such, getting it right at the outset of loan application is absolutely essential. 

As expressed above, understanding the specific needs of the business at a particular period of time can go a long way in making your loan work for you. Do you need to acquire more staff with the expectation that the addition of new staff will bring increased revenue or make the business more productive? Are you suffering from basic business equipment that you may need to acquire or repair? Have you also considered the extent of visibility your business enjoys with your target market and how much will be channeled into such? What about cash to meet up your business’s daily operational needs? Do you need the fund to expand your business operations or to cover cash flow fluctuations? These are germane key issues that must be closely examined before applying for a loan. 

We shall examine each business need within the purview of making the loan work for your business.

1. COVER CASH FLOW FLUCTUATIONS

Cash flow is an issue for many small to medium-sized businesses. Delayed payments can mean your business is left without vital income for up to 90 or even 120 days. Depending on the type of business loan you have acquired, you might consider using it to cover gaps in cash flow.

2.  EXPAND YOUR OPERATIONS

If your business is doing well, it might be wise to use your loan funds to expand. You may consider opening up a brand new retail location, a second warehouse, a brand new office space or even start selling online products overseas. Restaurants are an excellent example of businesses that would have the benefit of having multiple locations.
Expanding your customer base is always a win just ensure you’ve done your research so the investment is worthwhile.

3. MARKET YOUR PRODUCTS OR SERVICES

Marketing can make or break many businesses and ignoring marketing due to the costs involved can end up being a costly mistake in itself.
Whether it is online marketing, an ad campaign or getting some PR expertise, you’ll need money to get started. Make sure you choose the right type of marketing for your business to ensure you get the best return on investment.


4. BOOST YOUR ONLINE PRESENCE

Having an online presence, whether it’s a website or a social media page, is invaluable these days. By establishing and maintaining a website and / or social media accounts, you can increase your customer base and also your marketing capabilities. However, you may need to hire professionals to execute this.

5. PURCHASE NEW EQUIPMENT

Purchasing equipment can take your operations to a new level, whether it’s industrial equipment or a new point-of-sale (POS) system. This can also improve your cash flow If you are currently leasing equipment, as you won’t have to make regular lease payments.

When considering whether or not to purchase equipment with your loan, look at how much has been approved for your business and consider how much you really need the new equipment. There’s no need to spend your funds just because you have them. Most lenders would approve only what your business needs.

6. MAINTAIN A GOOD RELATIONSHIP WITH YOUR LENDER 

Make sure that you keep a good relationship with your lender and make payments on schedule or even ahead of schedule if circumstances allow. If you are going to make a late payment or you are unable to pay for a while, make sure you inform your lender.This is a good way to ensure a healthy relationship with your lender and make it easier if you need to borrow more or request for another loan in the future.  

Having a game plan for how you are going to spend your business loan is important. Your business would benefit from adding new products, entering new markets or opening a new location whatever it is you want to use the loan for. Whatever it is, before you apply or accept a loan for your business make sure you’ve thought through the most strategic way to use it. Also, make sure you read and understand the terms and conditions stated in the loan agreement. Look at the pricing, interest rate, as well as your monthly or weekly installment to determine if it would be ok for your business. Ask questions to know if there are hidden charges apart from what was communicated to you. Also ensure that your projected inflow can service your loan repayment more than enough. 
In conclusion, if all these things are put in place before and after getting the loan you are on your pathway to making your loan work and deliver valuable revenue results for your business.