How to get funding to upgrade your small business

Content provided by a guest contributor.

Owning a successful business is difficult. There are many people who have tried to run a successful business but didn't succeed. As a small business owner, you should feel proud that you have managed to run a flourishing business in such a competitive environment. But over the years things change and a few upgrades towards your business are needed.

A small business needs business loans to cover cash flow gaps, add to the working capital or to grow the business. There are many ways that you can finance an upgrade for your business by applying for a small business loan. Knowing how to get finance is important for small business owners.

Here are a few helpful tips on how you can receive funding for your business.

Have all the necessary documents

Before you plan on finding finance or an investor, you need to have all your documents in order. You also need to prove that your business will have the resources to pay the debt. Before you go to the bank, make sure you have all the necessary documents like your business plan, business strategies, tax returns and your latest financial statement.

A solid business plan will make it easier for you to receive finance for your business. Your business plan is what can help you communicate with potential investors and lenders who can assist you in reaching your business goals.

Potential investors and lenders need a reason to spend their money on your business. Your business plan should help them see your vision. Your business will become stagnant without a great business plan because, without one, no one will fund your business.

Know what you want

Before going to a lender for financial assistance, proper planning is important. Know what you want and what you are planning on using the money you receive for. Lenders want to know how much money your business needs and how much time do you need to repay the money back.

It’s also important that you know which loan you need. For equipment, you have the option of buying or taking it out on a lease. You need to think about the lifespan of your asset, if you know that in a few years it will be outdated then it’s best to lease it. The benefits of leasing are that leasing improves your cash flow and you get optimal VAT benefits.

If you know that the asset you’re needing is going to last you a long time and will still be valuable after you settle the debt, then you should buy it.

The benefits of buying an asset are that you own the asset after your last payment. You can claim interest payments and capital allowances as income tax deductions. The assets which you have obtained add to your company asset register which improves the equity of your business.

Choose the right lender

When looking for small business funding, it’s important that you choose the right lender. Yes, you may be stressed out and wanting to get the loan fast, however, be careful as there are plenty of fraudsters. Choose a reputable financial service provider that will meet your business’ needs. Speak to a financial expert who will guide you into choosing the best loan agreement for you. Once you have chosen a bank to approach, it’s important that you do your research on them and find out what you need in order to get funding. Going to a bank with some sort of knowledge can be helpful in receiving funding.

Your credit record matters

Banks offer both small- to medium-size businesses and big corporation business loans. Keeping a good credit profile for your business is important as it allows you to receive loans when you need them and allows you to have access to large credit amounts at a lower interest rate. For small business owners, keep in mind that, if your personal credit profile is bad, it might impact the chances for you to get funding for your business.

What you need in order to get funding

In order for your business to have a high chance of getting the loan, it needs to have been running and making a profit for at least three to four years. The lender will need to see your regular cash flow amount, contact details of your shareholders and directors, your business income statement and your balance sheet information.

Networking is key

The best way for you to expand your business is through networking. Networking will allow you to meet up and talk to business people, who could be potential investors. Not only does networking bring in investors who can assist you financially but it also gives you a chance to talk to people who can advise you on how to grow your business.


The content in this article was provided by Rogerwilco – a South African marketing agency based in Cape Town.

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