Financing can help you scale your small or medium-sized business, whether it’s for acquiring new equipment, securing desired space, or obtaining what you need. Likewise, it offers you a variety of options to reach your business goals. Here are five benefits of using commercial credit for your business:
1. Expand your business:
- Whether you need additional equipment, a renovation, or a new location, you can grow your business by utilizing a commercial loan. Commercial loans are an excellent option for expanding your business as they provide the necessary capital and help maintain cash flow during challenging times.
2. Independence from fundraising
- By securing cash flow for your company, you’re not dependent on others to sustain your business. Additionally, having a steady cash flow ensures economic stability for your business that others may not have. By securing alternative income sources, you can avoid disruptions that may interrupt your business operations.
- While crowdfunding may be an option for your business, prioritizing your company’s financial stability is crucial.
3. Improve credit history
- Obtaining commercial loans and lines of credit can help improve your commercial credit history, provided that you make timely payments. In other words, your business can build its credit by paying bills on time.
4. Hire employees
- When starting your own business, you have to wear many hats. When it’s time to seek additional help, commercial financing is the best option to invest in talented individuals while preserving the quality and performance of your business. A line of credit can assist you in hiring new employees and paying their salaries.
- Furthermore, a commercial financing plan provides payroll security for existing employees during slow seasons. Additionally, you can create an employee development plan to educate and train your workforce, ensuring optimal results for your company. This plan may include training courses, mentorship programs, incentives, and benefits for your employees.
5. Separate personal and business expenses:
- A common practice in small businesses is mixing personal and business expenses, which should be avoided for several reasons. Personal and business expenses can become entangled when transferring funds between accounts, withdrawing money from the business account for personal use, depositing signed checks from the business account into personal accounts, and vice versa. This should be avoided as it can result in poor financial reporting, potential audits, and legal consequences.
- You can apply for a dedicated business credit card to cover representation expenses or any expenses separate from personal expenses, strengthening your cash flow.
6. Tax Benefits:
- As a business, you may deduct all interest paid on business credit facilities and consider it as an expense. This is beneficial for your business as it helps preserve profits, provided that the deductions are used correctly.
If you’re interested in applying for any type of financing for your business or need assistance or guidance with any financial aspect, remember that Oriental is more than ready to serve you. Visit orientalbank.com for more information.
