Use Your Business Loan the Right Way

Business loans are simply loans from banks or other lenders that are intended to help a business thrive as is grows. They can also be used to start a new business from the ground up. A business loan is pretty standard in its terms and conditions even across different lenders but each lender is free to set their own rates, fees, and conditions. For example, Clydesdale Bank’s business loan rates come in both fixed and variable forms and offers terms anywhere up to 15 years. Depending on what you’re looking to do with your loan you’ll want to choose the lender that best matches your needs.

If you are looking to take out a business loan for your business but are unsure of the best ways to utilise the new funds, consider some of the common uses of business loans.

Acquisitions and Expansions

One way to use a business loan economically is to use the money to expand your current business or to acquire another business. If you see that there is a smaller business that is offering your company a good amount of competition or you just like what they’re doing and want to benefit from their knowledge and productivity you can use the money from your business loan to buy that company and house it under your own.

If you’d rather just expand your own business than acquiring an additional one you can use the money to add additional branches to your business or to franchise it out. This expansion may just call for paying additional employees in order to speed up your productivity.

Construction Projects

You may also consider using your business loan for a construction project. For example, you can improve your commercial real estate by expanding the size of your structure or to remodel the interior. You can also consider using the money for a new build to give your business a complete makeover. Remodels can elevate businesses, especially those in the entertainment sector. For example, a restaurant that may seem to be stuck in rut can improve their reputation with a complete interior remodel.

Real Estate and Equipment

Your business loan can be used for acquiring new commercial real estate to add to your business’s assets or to expand to new locations in different cities. For example, if you’re a boutique with a successful location and you’d like to open up a second shop in another city in order to expand your brand you can use your business loan to purchase that second location.

You can also use your loan to purchase equipment for your business. If the equipment you are currently using is starting to fail or is simply getting old and outdated you can take your new funds and upgrade your equipment in order to keep up with the competition.

Debt Consolidation

One of the most practical ways to use a business loan is for debt consolidation. Debt consolidation has a lot of positive points. When you consolidate your debt you can lower your overall payments by going from paying multiple bills with multiple interest rates to paying only one bill and one interest rate. You can improve your credit rating and get your business out of debt faster by consolidating through a business loan.