The challenges of running a business are manifold, ranging from managing cash flow, to navigating regulatory requirements and staying competitive in a dynamic market. Unfortunately, a lot of bad press about loans, often stemming from misconceptions, has caused many to hesitate about considering loans as a legitimate financial resource to address these challenges.
With the right funding, a business can expand operations, invest in technology, enhance inventory, or stabilise cash flow during seasonal dips. In this article, we’ll share a few situations where a small business loan can save your company.
Singapore is, thankfully, one of the few countries that does not often face some of the more destructive natural disasters faced elsewhere, such as earthquakes, or volcanic eruptions. However, we are not exempt from other unfortunate incidents that can happen to a business such as fires and floods. These ‘force majeures’ other than causing damage to your business, may prevent you from conducting business for some time.
In situations like these, a small loan can help your business recover faster, whether it’s covering the cost of repairs, replenishing inventory or meeting unexpected expenses.
Economies are cyclical, even in the absence of major disruptions. Demand for your products and services may decrease; Consumer behaviours may shift in response to a new trend; laws and new regulations may introduce barriers that impact your revenue streams. Having some financing will allow you to explore different solutions to address declining sales.
Failing that, you can opt to use the loan to invest in researching and developing new products, as well as increasing your understanding of consumer wants and needs.
Small business loans will be able to tide you over during challenging economic times. For example, you can use the loan to cover your overhead costs, especially if you need to maintain certain assets which are crucial to your business, such as rent, utilities, sales and marketing, or maintenance.
Times of economic uncertainty may also require you to take steps to make adaptations. For example, many businesses invested in starting online stores during the pandemic in order to overcome social distancing rules. These adaptations no doubt require some costs as well, which is where a business loan can help.
No matter how regular you are with maintenance, damaged and broken machinery or parts are part and parcel of any business. This also extends to the maintenance and repairs of your buildings, including electrical systems, plumbing and structural repairs.
For situations like these, you can always choose to take on a small loan, especially if you don’t have adequate savings to cover the costs of the repairs or upgrades. When your business is able to operate at its full capacity again after these repairs, you will then be able to generate a sufficient income and repay your small business loan in instalments.
For many business owners, any opportunities for growth must be seized at the risk of missing out on favourable circumstances that may not come around a second time. For instance, you may want to develop a new product or service in response to a new trend. Or, you may need help in bringing your products or services to a new market, to gain the first-mover advantage. Taking a small business loan will give your business the financial breathing room needed to take advantage of new opportunities for growth.
If you find yourself in need of financing urgently but don’t know where to start, we can help. Whether this is to fund your operational costs, cover unexpected expenses, or seize opportunities for growth, Lendingpot offers a one stop solution for your business financing needs.
You don’t need a laundry list of documents, or a folder full of forms to fill, you only need your Singpass or Myinfo business account to begin receiving financing offers from more than the 45 lending partners on our platform. Reach out to us to learn more about how we can help your business achieve its financial goals.
Lina heads up all things marketing and branding at Lendingpot. With a keen aesthetic eye, she believes in the use of design to communicate with our SME community and aspires to turn Lendingpot into a household name. Out of work, she is an avid camper and appreciator of nature’s best works.
