There comes a time when every small business owner finds themselves in need of some extra cash flow to help out with any necessary expansion. Whether you’re trying to increase your product line variety, space, equipment range, etc. it’s probably going to cost you a considerable amount. Fortunately, as an owner of an established and thriving business, you have a few options.
What Kind of Assets Can You Use as Collateral?
The most obvious option available to you is a loan. A viable business plan and valuable collateral are definitely necessary in order to secure loans for expansion. There are many different types of loan that you can apply for but generally, there are only three that you’ll need to worry about. Unless you qualify for special government funding. They are-
- Personal Loans- As you probably recall from the early stages of setting up the initial financing for your business startup, personal loans can be difficult to secure. They may be a great option for you if you’ve used profits to purchase personal assets of value. If your credit is exceptionally good and high-value items as collateral, you’re in great shape.
- Commercial Loans- Commercial loans will be considerably easier to obtain now that you have an established business with a financial history that shows success and increases in productivity/revenue.
- Commercial Real Estate Loans- Finding a commercial real estate loan as an entrepreneur would be next to impossible. However, with a solid financial history record, it’s fairly easy to use your business assets as collateral for this loan type.
More Creative Methods of Utilizing Assets to Make More Money
If you’re interested in investing a bit more time and effort in exchange for keeping your assets safe (and equitable), there are some creative options available. These methods can help with capitalizing on your existing business assets. Below is a list of a few of our favorites-
- Host advertisements and social sales content for other related business services on your site
- Rent out unused space and/or equipment during your business’s down time
- Offer employees stock options in place of raises or elevated wages
Money makes money. There’s always a way to turn $1 into $2, it just might take a bit of time and effort.