How business financing can increase your bottom line in 2019

As you close out the books on 2018, you’re ideally ending the year firmly in the black. Looking ahead to the new year, your sights may be set on increasing your business profitability even further.

Trimming expenditures or increasing prices could result in a healthier bottom line, but financing could give your profits an even larger boost. Here are three ways to put business financing to work and advance your growth plans in 2019.

1. Upgrade or repair your equipment

If your business relies on specialized equipment to operate from day to day, keeping that equipment in good working order is critical. When your current equipment is long overdue for a repair or technology is pushing it into near-obsolete territory, you can turn to financing for the capital you need to replace it.

Equipment financing may be the most obvious choice but you could also use a general business loan to make upgrades or repairs. As you consider financing, evaluate the return on investment, specifically in terms of how new equipment could potentially increase sales. If new equipment would allow you to be more efficient, working more quickly and serving more customers within the same amount of time, for instance, financing could be well worth it.

2. Develop new products and services

Expanding your products and services can reinforce the loyalty of your existing customers while also attracting the attention of new ones. The potential payoff for your business is an uptick in sales which, in turn, directly affects your profit margin.

Developing a new product line, however, requires capital to source materials and cover the costs of production. Adding new services has its own cost component, in that you may need to hire and train additional staff to keep pace with rising customer demand. Business financing can help you fund both types of projects.

A financing option like an SBA (Small Business Administration) loan may be the best option if you require a large amount of capital and can wait for review and approval. On the other hand, if you have a smaller capital need, you may consider an alternative lending source, many of which can often provide funding in days.

3. Refinance existing business debt

Debt can be a drain on your business’s financial health, particularly if you’re carrying a high interest rate. With the Federal Reserve expected to continue its strategy of raising the federal funds rate throughout 2019 and perhaps beyond, now is an excellent time to consider refinancing your debt at a lower rate.

With any type of business refinancing, consider the APR, fees, and repayment terms. Ideally, refinancing should enable you to add money back to your cash flow in the form of interest savings. That, along with the other strategies outlined here, can help you set the tone for a successful 2019 where your bottom line is concerned.


Writer: Rebecca Lake