Business Expansion Loans

Written by James Kitchens
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Improving the profitability of your business is sometimes a Catch 22 situation. You can't expand until your profits are raised, and you can't raise profits until you expand. If this is your predicament then a business expansion loan may be your only way out. Some businesses are actually more profitable when they are small, and will lose an element of their success if they expand beyond a certain point.

For others, the point of optimum operation is set a little higher than this. For them, a realistic level of profit will not materialize until they have reached a certain level of capacity. For such companies a business expansion loan can literally be a lifesaver.

The loan could be used in a number of ways, such as purchase of equipment or premises, or hiring of necessary personnel. Sometimes increasing inventory is all that's needed to expand the volume of business. Before arranging for a loan it's important that you are very sure where your greatest asset will lie, regarding expansion plans.

Shopping for Your Expansion Loan

As with any type of loan, it's worth shopping around to get the best rates. Small business loans are often tied to the housing loan rate. Ideally, look for a fixed rate, low cost, long term loan for your business expansion needs.

One word of advice: before you go ahead and take out a loan, first find out if you may be legible for a government small business grant of any kind. You can inquire at your local state development agency. While federal grants are not available for business expansion, at state level there is often provision for such assistance.

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