The Purpose of Growth Capital

The Purpose of Growth Capital

Small business owners have no desire for their companies to stagnate in mediocrity; instead, they look for profitability and growth. To accomplish this, they require a source of funding that enables them to accomplish their visions for expansion. Growth capital differs from working capital in that it is not meant to finance day-to-day operations but to help businesses meet their long-term plans. Growth capital can take the form of term loans, lines of credit, financing from the U.S. Small Business Administration, asset-based lending, factoring of accounts receivables, merchant cash advances, and other alternative means. Here are some of the purposes for which you can use growth capital once you have obtained it.

Buy Commercial Property

A common use of growth capital is for companies to purchase the real estate on which their business operates. Taking out a real estate loan to buy property can cost you substantially less monthly than the payments you currently make each month to a landlord.

Hire Additional Personnel

If your company is growing you will require more help. Consider expanding your workforce so you will be able to ramp up production to meet the needs of new markets and opportunities.

Obtain Equipment

Your employees will need cutting-edge equipment to be able to increase production and reach your goals for growth. You can make outright purchases of equipment you will need for the long term, and lease equipment for short-term requirements.

Improve Marketing Efforts

To augment your plans for company growth, you need an improved marketing strategy. Invest growth capital in increased marketing so that advertisements of your products or services can reach a larger audience of consumers.

Open New Locations

Once you have established your business in one location, branch out to new areas by opening further locations. Growth capital funding can help you expand your company into new territories. Another method of expansion is to acquire existing businesses and absorb them into your own company. Growth capital can help you accomplish this.

For more advice on acquiring and purposefully using growth capital, contact Masters Commercial Capital Group.