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The benefits of startup loans

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When you start a new business there is an incredibly steep learning and delivery curve to navigate, an intensive period of change and development and plenty of challenges along the way.

Finance is always a challenge for startups and a healthy cash flow can often spell the difference between success or difficulty, especially when other finance routes such as angel investment have not been secured.

So how can startup finance help you to successfully navigate that all-important first year?

Breathing space

When you have startup finance in place, it takes away the stress of needing to find cash to finance your operation in the short-term and allows you to focus on your strategic goals until you start to turn a profit.

Liquidity

Most startups will have a healthy enough cash reserve which allows them to manage risk and to have a safety net in place. A business loan allows this cash reserve to remain in place and a healthy degree of liquidity to remain.

Startup costs

Many startups need to invest heavily at the start of their business, particularly if they need to develop new solutions or technologies, invest in infrastructure, train staff or take on new business premises. Aspects such as initial stock orders, website builds, marketing campaigns and so forth can require a hefty chunk of financing – and the right startup loan can help to overcome this barrier.

Opportunity

Other startups see an early opportunity to enjoy a competitive advantage by rapidly navigating into a market segment in which they feel they can add better value. This will often require the creation of an innovative new solution – of course, requiring expense! A business loan can allow this opportunity to be taken with both hands.

Nasty surprises!

Whether it’s a larger-than-expected VAT bill or business rates, rising import costs due to the changing price of sterling, higher than budgeted software licence cost or unanticipated recruitment drive, costs always arise in that first year of business that cannot always be budgeted for. Forget expensive overdrafts – a competitive business loan at favourable terms will allow you to plan, budget ahead and provide the finance that you need to embrace opportunities and overcome challenges as your new startup grows and starts to experience success.

Contact us now to find out more!

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