Despite sole trading being a simple and affordable business structure, it can sometimes become challenging for the owner to manage. The Financial predicament is one of the greatest nightmares sole traders face. This is because finance influences a number of business aspects including planning, management, technical and production skills, labour issues, community issues, principles of technology, and health, safety and environment. Small business loans can help by providing adequate funding for your business.
Sole Trading- A Not So Easy Task For The Owner
Most sole traders face financial challenges, which means they may need to purchase inventory, struggle with their daily expenses, tender for projects, purchase equipment, fund marketing campaigns, expand physical location, consolidate debts, pay wages during peak season or grab a prevailing business opportunity.
This challenge, if not solved appropriately, can result in business failure since most aspects of business rely on funding. Therefore, business owners need to constantly maintain financial security by securing sufficient funds for their businesses, which must not necessarily be a part of the working capital -they can seek financial back-up for their businesses from alternative sources of finance.
Why Sole Traders Need Small Business Loans
Sole traders may need small business loans to:
1. Keep Up With The Market Trends
Sole traders can use small business loans to keep up with the market trends. Keeping up with the market trends can help your business stay on par with your competitors. You will constantly need to shape your business in relation to the trends and fads developing in your field.
You can apply for business loans to boost your financial capability to enable you to conduct a market trend analysis perfectly. Market trend analysis is the comparison of industry data for a set duration, purposed to identify any steady trends or results, which could be used to map a business strategy. Market trends are likely to be influenced by consumer behaviours and habits.
2. Acquire The Funds Needed To Employ People And Pay Them
You can opt for a business loan to acquire the required finance to hire highly-qualified and experienced personnel for your business. Highly-qualified candidates tend to have a stronger desire to work and are likely to add more value to your company.
Sometimes, it can be expensive to maintain your employees, especially if you have hired a highly-reputable staff, who, in most cases, may demand a higher salary. Business loans can relieve you of the worry of inadequate finance by helping you raise the required funds for your employees’ salaries.
By securing sufficient funds to run your business, you are able to increase the number of employees in your business based on the demand – as your company grows; the number of tasks to be fulfilled also increases; hence may require additional staff.
3. Make An Online Presence And Open A New Outlet – Unsecured Or Secured Business Loans
You can use unsecured business loans or secured business loans to open up a new outlet or make an online presence. You may need additional space for your employees and customers as your business grows.
A majority of customers love shopping or seeking services from businesses with ample space. They may need ample space for parking as well as a free movement; hence are likely to opt for spacious stores. Creating an online presence can significantly boost your business as it is likely to cover a vast audience area, which constitutes the potential customers.
The global digital population has been rising exponentially and is expected to continue rising in the coming years. This means a promising future for businesses owners with an online presence.
Currently, the world’s digital population is estimated at 4.2 billion people, who are considered active internet users. Consequently, getting a small business funding to invest in an online presence may ultimately boost your overall sales.
To apply for an unsecured business loan if you are a sole trader, you don’t need to provide security; hence, you don’t have to worry about losing your assets in the event you default on your loan repayment. This business loan offers you easy repayments based on your cash flow. You don’t have to wait for days for funds to be available in your business account as your lender will avail to you the required business finance within 24 hours.
Also, unsecured business loans feature minimal paperwork consequently reducing the hassle of getting many documents. On the other hand, while applying for secured business loans, you will need to provide security for your application to get approved.
However, secured business loans offer you the benefit of lower interest rates compared to unsecured business loans which generally feature higher interest rates. Also, you can acquire higher loan amounts to fund your business compared to unsecured business loans which typically feature lower loan amounts.
4. Pay Suppliers – A Line Of Credit
A business line of credit is a suitable business financing option that sole traders can use to fund their businesses’ expenses (such as paying suppliers) effectively and conveniently. Sole traders can transact this loan option within their approved credit limit.
A business line of credit offers you more flexibility than a regular business loan since it is an open and revolving facility without set-up cost. Amazingly, a line of credit allows you to pay only for the funds drawn with no line fees.
Hubbe Australia is one of the ideal alternative lenders to consider when looking for a small business loan such as business equipment finance, unsecured business loans, secured business loans, business line of credit, invoice finance and business vehicle loans. This loan facilitator is highly regarded because of its hassle-free and quick loan approval process that enables borrowers to meet their business needs anytime, anywhere!