How Can You Finance What You Know to Be a "Sure Thing" Business Expansion?

Being a homeowner and small business person isn't always easy. Learn how a industrial contractor can help you balance both responsibilities.

How Can You Finance What You Know to Be a "Sure Thing" Business Expansion?

How Can You Finance What You Know to Be a "Sure Thing" Business Expansion?

31 August 2015
, Articles

If you have an idea on a way to expand your manufacturing business and produce more (or different) product, you may be struggling with the conflict between what could prove a lucrative investment and a lack of working capital. Without proof that your business expansion will allow you to repay your loan, you may find it difficult to secure a loan for the amount you think you'll need -- but how can you make this proof before you've been able to expand? Read on to learn more about what you can do to improve your business without spending much, as well as some factors that could improve your odds of receiving a loan.

Consider your true needs

Instead of shooting for the moon, you may want to go over your various options to consider how you can determine your return on this investment without paying as much on the front end. For example, instead of seeking a loan to construct and equip a new boiler room to help power your additional equipment, you may be able to rent a mobile boiler to provide temporary power to your facility. This can allow you to "test drive" your expansion and determine whether it truly is a worthwhile investment before sinking money into your infrastructure that may prove not to be needed. You can talk to companies like Nationwide Boiler to learn more.

You may find that lenders are more willing to lend you a smaller amount of money to test drive an expansion for a set period of time than commit to a multi-decade repayment of a significant infrastructure loan that your business income may not be able to support in the future.

Go energy-efficient 

Choosing to go with with energy-efficient improvement and expansion options can help improve both the scope of financing you can receive, as well as reduce your business's energy costs going forward. Depending upon the type of energy-efficient investments you make, you may be able to receive an up to 30 percent federal income tax rebate on the cost of these improvements. Solar energy is one area in which the federal government has chosen to invest by encouraging homeowners and business owners to switch to solar panels. This tax credit will immediately reduce the cost of your improvements by nearly a third, and may be a sufficient reduction in cost for your business to obtain a loan.

There are also a number of local energy corporations and cooperatives that may offer you tax incentives or rebates for making energy-efficient improvements to your business (even if these improvements come in the form of an expansion that also benefits you). You'll want to fully investigate both the energy-efficient building and power options available to your business and the potential tax credits your business can receive to reduce up-front costs and lending requirements.

Investigate governmental incentives

If your expanded business is projected to employ a significant number of people, you may qualify for certain government grants or tax credits. Encouraging the expansion of good jobs is one thing nearly every state and local government has in common, and many have developed programs that will reduce the costs of expansion for those who will be bringing jobs and other economic benefits to the region. 

You may want to seek assistance in writing a strong, solid business plan that will set forth the positive economic impact your business's expansion will have on your area and present it to your city or county council. Other government agencies (like the Small Business Administration) may be able to guarantee your loan or help steer you toward programs that will reduce the amount you'll end up paying to improve your business.

About Me
Equipment and Supplies: Construction and Building Made Easy

When I have huge projects to do, I contact a industrial contractor for my equipment and supplies. Being a homeowner and small business person isn't always easy. Tough projects pop up all the time, and if I don't have what I need to complete them, I fail big time. I learned to rely on an industrial contractor for help. My contractor offers the latest equipment to build, excavate and repair my structures, as well as the most innovative supplies on the market to complete the work. If you face numerous obstacles in your home or business, call an industrial contractor. My blog offers great tips on how to find the contractors you need and when. I also talk about the problems we face when it comes to building and construction. I make it easy for you. Thanks for reading.