Do you have this great business idea? Are you confident that you possess the knowledge and the experience required to run a profitable business? That’s great! Now comes the next question – will you be able to handle the challenges at each stage of business before the idea becomes a reality?
Every successful business needs to have a viable business plan – from finding your first customer to reaching a stage where you have acquired a certain market share and are in the process of expansion. This road map is the difference between success and failure.
One of the biggest roadblocks to business growth is funding at each stage. What makes matters more challenging for a start-up is getting the required loan amount. This is because the business has not acquired enough goodwill and because collateral is usually mandatory.
This is where unsecured business loans come in handy. These loans don’t need collateral and funding is provided against the business cash flows.
Let us find out the various stages of business growth and funding solutions.
Here Are the 5 Stages of Business Growth:
This is the first stage of business, where you need to simply find customers for the goods and services you provide.
The owner takes the key decisions and manages the staff directly. The challenges here are growing from one customer to finding broader acceptance from a number of customers.
To meet the growing cash demands and graduate to stage II of business growth, you need immediate funds. The best mode of funding at this stage would be fast business loans that don’t require collateral or goodwill.
The owner is still is the key person for the business. The owner is assisted by a sales manager or foreman. There is sufficient cash flow due to acceptance from a larger base of customers. The challenges now would be having sufficient cash to break even and funding the wear and tear of capital assets.
The owner would be contemplating expansion to earn sufficient return on investment from labour and assets. Typically, family-run businesses and manufacturing companies, yet to achieve the desired profitability, fall in this category.
The solution here would be simple business loans like invoice finance, where loans are provided against debtors as the business has a steady customer base.
At this stage, the business has achieved both stability and profitability. The owner does not need to be involved in the operations of the business. If the business has quality management and is able to adapt efficiently to the changes in the business environment, it could sustain this stage of growth indefinitely.
Even though there are no cash constraints, preserving it would be a challenge. One way of checking cash outflow would be to use a business line of credit.
These unsecured business loans will allow you to pay your suppliers on a revolving credit basis. The owner needs to focus on systems and operational planning to transition the business to the ‘take-off’ stage.
The fourth stage is the most crucial for any business. The owner needs to strike the right balance between the delegation of responsibility to the managers and have access to funds for meeting the cash requirements.
They can get access to funds from unsecured business loan lenders through multiple modes like business equipment finance or merchant cash advance. These lenders provide fast business loans that are required at the take-off stage.
Business equipment finance is provided for purchasing business equipment like general plants, office space, or IT equipment. Loans are provided against bank statements. Financials are not required.
Another very effective mode of funding at this stage of business would be merchant cash advance. There are a lot of lenders providing unsecured small business loans in Australia like Hubbe, which provide such financing.
This mode of financing enables you to repay the loan according to your varying cash flow, with higher repayments during higher cash flows and lower repayments when cash flows are low.
Your working capital needs for renovations, costs of maintenance, tiding through lean business periods, and more are met through a merchant cash advance.
The challenges at the final stage of business growth would include consolidation and preserving the financial gains accruing from the fast-paced growth of the business.
When it comes to unsecured finance Australia, you can choose from a lot of lenders such as Hubbe, which has sufficient experience in providing easy business loans without collateral. These loans provide the funds required to meet business challenges quickly and let the owner focus on business growth.
Grow your business with Hubbe’s unsecured business loans
If you are looking for unsecured business loans in Australia, there are experienced lenders like Hubbe who provide collateral-free business loans to start-ups. They provide loans with flexible repayment tenures at competitive interest rates.
These are the stages where unsecured business loans play a vital role in different stages of business growth. With unsecured small business loans in Australia, get ready for your success story!