There are various ways to decide how much finance your business should take. In this blog article we look at some considerations that you could make.
If you would like to discuss your plans with an experienced finance professional, do contact our team today.
When calculating how much finance you need you should consider all the costs that you might need to meet.
For example, if you are purchasing new equipment you should review the quantity will you need and if this is likely to increase.
You might be able to negotiate a better deal with your supplier by making a bulk purchase upfront.
Are their any additional costs?
Consider additional costs that you might incur such as ongoing service or costs for warranty or insurance.
Getting quotes for your purchases in advance can help you calculate the amount that you will need to borrow.
Make sure you have a fall back
For larger projects and those which are more difficult to predict, you might want to build in a contingency fund, so that you have a buffer of additional finance should it be required.
For example, if you are funding an advertising campaign, if you achieve a good level of success, do you have the finance to buy or make more stock in time to sell it.
Have a goal or target in mind
If you are borrowing to support your general growth plans then you could consider your intended growth target, such as additional turnover you expect to reach.
Then consider how much additional financing your will need to reach this goal or whether you will borrow a percentage of your eventual target.
Of course, with any finance, you should also consider your repayments and how much you will be able to repay each month to ensure that the finance is viable for your business.
Contact us today to discuss how we can help get the finance that your business needs.