How To Overcome Challenges in Growing a Small Business

by | Oct 17, 2019 | Business Management

It is often mentioned that more than half of new businesses fail during the first year. However, according to the Small Business Administration, only 30%fail during the first two years of being open. There’s still a significant number of businesses that thrive beyond 2 years. Sustaining your business for the long haul need not be a difficult thing to do when you know the following signs and take steps to boost your operations.

  1. What are the signs to look for before you expand your small business?

So now you have launched a business and had it running for a few months. How will you be able to make things even better and expand? Here are the key factors to consider before scaling up your business.

You have a good team as the backbone of your business 

One thing to consider when expanding a business is having the right staff to accelerate growth. Your team is what keeps your business going. With the right team members focused on achieving the purpose of your venture, you’re off to a good promise of increasing your output, sales and profits. Make sure you have good people helping you at work, and promote a positive work culture for your business to thrive for years to come. 

You have a loyal customer base 

Amongst all other things, you must have a steady flow of customers. If you’re customer base is growing, or you are already fielding requests for more products to sell, this may be a prime time for you to grow your business into something bigger. How do you foresee your business to be successful in the industry? What is your desired revenue or profit within a year? Your answers to these is like starting with the end in mind. Then you can move backwards as to how you’ll accomplish these goals one step at a time. 

You’re realistic about what you can handle

Let’s say you are earning $15,000 per month in your small business and you want to double your profits within the next few months. What are the things you need to purchase, implement or accomplish in order to achieve that growth? Are you ready to take in the time and effort needed to grow your business the way you dream it to be? Remember that you also have to consider time for yourself, your family, and other factors before committing to even bigger dreams in business. Be realistic as to how much you can handle, and how feasible your business projections are. 

You’re achieving your business goals

You have to prove that you are meeting defined targets and objectives to build internal and external confidence in your company. For example, if you plan to reach 2000 targeted customers in a month, and your team was able to achieve more of that target for several months, then you’ll have the numbers to confidently show investors for them to support you. 

You have the cash flow needed to expand

You won’t be fully prepared to grow your business if you aren’t in a position yet to carry the business until the sales catch up with the investment. You need to have positive cash flow to drive your business even higher. You won’t be in the right mindset to expand when your cash flow is in the red.

two business owners looking at a tablet in the cafe

  1. What are the common challenges in expanding a small business? 

Australia may have one of the most robust economies in the world, but it isn’t a pristinely perfect setting for the regular entrepreneur. Take a look at the following issues which may affect your business in Australia.


Limited Cash Flow

Business owners account inadequate cash flow or high cash use as a point of failure in business management. Financial management and proper record keeping are crucial to manage a business and make it thrive. 

Pay to Play in Marketing Online

It’s getting more and more difficult for small business owners to gain organic reach in social media platforms such as Facebook because online giants are prompting business to pay more for promotional posts. To put your promotions on the fast lane, you’d have to pay for ads regularly to get your products and services seen by a targeted audience. This adds extra costs in running a business, and relying on organic traffic alone will take a long time to drive results. 

The Myth of ‘Physical Retail is Dead’

If you are worried about bricks-and-mortar shops failing in the current economy that favors online marketplaces, even more, remember that physical retail isn’t dead (but boring retail is) as aptly stated by Steve Dennis, LinkedIn Retail Influencer and President of Sageberry Consulting.

What retailers or business owners need to know is that they have to evolve quickly in the ever-changing market landscape. They have to put a focus on providing a great customer experience in a physical store that cannot be done through eCommerce sites. Bricks-and-mortar businesses can still thrive if they continually innovate through omnichannel selling and a well-rounded customer experience. People will still go to physical stores for that much needed instant gratification that no online store can give.

small business loan form

  1. Supporting the Growth of Your Business: How to Get a Small Business Loan

If you have everything fall into place and are ready to expand, a business loan can put your game to the next level. If managed correctly, loan financing can help you in growing your business – which you may not be able to do if you just settle with your current finances. The key focus here is being able to implement your business strategies, and the right financing can help you do that.

What are the loan requirements that you need to fulfill as a small business owner?

So what should you prepare before diving right into getting a business loan? Before forging ahead and presenting yourself to a lender, here are just some of the things you need to accomplish:

› Documentation on the amount to loan and use of funds: You’ll need to lay it all out how much you need to loan and what you will use it for. You can also create a proper business plan for this purpose. Do your research to support the numbers you will show to the lender. For example, if you need to renovate your office space or shop, get quotes from the contractor or companies that will supply materials and do the renovation for you. If you need money for equipment, ask suppliers how much it would cost you.

› Identification: Banks or Lenders will have to know who you are, including background research on you. Prepare your ID’s such as driver’s license, passport, or both – as this is the first step in accomplishing business loan requirements.

› Financial Statements: Most lenders would require you to submit your financial statements. This can include Balance Sheet, Income Statement, Cash Flow Statement, and Statement of Retained Earnings. Double check with your lender on which statements you have to bring. You may also be asked to bring documents such as your most recent tax returns and business activity statements.

› Bank Statements: The lender will also want to see your latest business bank account statements. This can be either in hard copy or electronic form. Business savings and credit card statements showing assets and liabilities will also be required when applying for a business loan.

› Proof of Personal Income: You also have to provide your two most recent tax returns and notices of assessment if you are a director or shareholder in a company.

› Credit Report: The lender will review your credit report for them to know your financial standing. If you have late payments, defaults, and judgments, it will be more difficult for you to get a business loan.

› Collateral for a Secured Loan: If you want to get a secured loan, you’ll have to check what you can pledge as a form of collateral. This can include residential property, commercial or rural real estate, or business assets. 


What are the types of financing sources available for small businesses?

Once you have the basic requirements ready for getting a loan, check out these types of business loans, you may want to consider applying for:

› Traditional Bank Term Loans: A bank term loan requires you to complete a lot of paperwork. Besides the application, you’d have to provide financial statements and a business plan. This is a form of secured loan that requires you to provide a collateral. However, getting approved takes a lot of time, and may even take up to two months. The upside to this is that the interest rate will be lower compared to other types of loans. You’ll have to do regular monthly payment until the loan plus interest is completely paid. 

› Business Credit Cards: This is a popular form of small business finance, but the interest rate is usually high. They do offer an interest-free period on charges. For example, if you pay off the loan amount within the 55 days of the charge, you don’t have to pay for any interest. If you’re going to apply for a business credit card, the card provider will require you to submit information such as income, length of time in business, credit report, and credit score to determine your credit-worthiness. 

› Business Overdraft: This allows you to run a negative balance on your regular transaction account up to a certain amount. You’ll have to pay the interest on any funds that are overdrawn. Besides the interest to pay, you’ll also be charged with certain fees. You can get business overdrafts in secured or unsecured forms. 

› Business Line of Credit: This type of loan allows you to borrow an agreed amount, but it’s okay to only pay for the interest on what you actually use. Take, for example, the bank approving a line of credit for $100,000, but you only use $50,000 from it. You’ll only pay for the interest of the $50,000 you used. You can repay the loan at your own pace and have the flexibility to get money only when you need it. However, if you are going to loan something lower than $50,000, you won’t get this type of credit option. 

› Business Equity Loan: This loan will entail you to provide collateral in the form of residential or commercial property. You can borrow up to 100% of the value of a residential property used as security for the loan. A competitive interest rate will also be given. However, your property is at risk if you get into financial trouble and cannot make the repayments. 

› Low-doc or no-doc business loan: If you haven’t established any financial statements and proof of income for the past two years, a low-doc loan could be an option. A no-doc loan can be applied for if you don’t have proof of income. Low-doc and no-doc options are backed by residential property. The downside to these kinds of loans is they have higher interest rates. Approval for the loan can vary from a few days to several weeks. 

› Invoice Financing: You can work with an invoice finance company to receive funds sooner if you don’t want to wait to receive money from your customer invoices. Once you create an invoice, you can submit it to an invoice company, and they’ll pay you a percentage of the total invoice value. They will also charge an advance fee from the invoice amount. When the customer pays for the amount, you’ll get the money minus fees. 

› Unsecured Business LoansUnsecured loans are perfectly suited for small businesses due to the convenience of getting them. You won’t have to go through a complicated application and lending process. The lender will analyse your finances, which includes bank transactions and other information, to determine how much will be loaned to you. You also don’t need to provide collateral. Unsecured loans can be approved in as quick as 24 – 28 hours, and at times you’ll only need to show bank business statements and financial management statements.

business owner working on laptop

  1. Using a Business Loan Calculator – Looking for the Best Lender

As you go over the different loan options you can find online, take note of the interest rates and repayment terms on offer. Use a Business Loan Calculator, which you can find on sites such as, Nerd Wallet, or here at Bizzloans can help you foresee how much you need to shell out every month to pay off a loan.

In a Nutshell

It’s not easy to scale up a business, but careful planning, calculated risks, and hard work will pay off in the long run. Remember to have a back-up plan when you get affected by market challenges, and don’t be discouraged by them. Planning will help you win half of the battle, and pushing yourself to achieve your targets will eventually get you where you want to be.

You also don’t have to wait for many months just to save up money to grow your business. There are loan options available which will help you accomplish your goals now and pay for it later.

Among the various types of loans, unsecured business loans are greatly helpful for entrepreneurs because they don’t have to submit a ton of documentation and secure a collateral. Take a look at Bizzloans unsecured loan options which require no collateral and gets you approved in as quickly as 24 hours. For unsecured loans up to $150,000, you’ll only need to show business bank statements. For over $150,000, you are only required to submit simple managerial financial statements.


No Security Necessary

The main thing that makes unsecured loans more attractive than secured loans is the fact that they’re no security. It might be an obvious thing to highlight but it clearly matters. You won’t be weighed down by the pressure and worry associated with having collateral hanging over you and potentially being lost to the lender if you fail to make repayments. If you don’t want to take the risk of losing your collateral, you just need to opt for an unsecured loan instead. It’ll allow you to avoid any risks associated with secured loans.

Build Up Your Future Credit Score

By taking out a loan and then paying it off on time, you will help to build or repair your credit score. Many companies are dealing with poor credit, but by taking out an unsecured loan with a lender that is happy to lend to companies with poor credit, you can start to turn the situation around. Meeting regular repayment deadlines shows the world that you are able to stay on top of your financial obligations and pay off the money you owe, and that will only help your business going forward.

Why Your Business Might Want to Take Out an Unsecured Loan

There are lots of reasons why your business might take out a loan, as well as reasons not to. You shouldn’t take out a loan to cover running costs, but if you want to do other things, such as the things we’re going to discuss below, an unsecured business loan can be ideal.

Grow and Expand

Most entrepreneurs have big plans for their businesses. They want to ensure that their business is one that’s got a bright future. So if the time has come for you to grow and expand your business, you should think about whether taking out an unsecured business loan might help you to do that. It could be exactly what you need to get your business moving in the right kind of direction. It takes money and investment to grow your business and a loan might just be the ideal solution.

Take on More Clients and Customers

If your business doesn’t currently have the resources to deal with more customers and clients, it could be time to scale things up. However, that’s something that costs money, whether you like or not. Taking out an unsecured business loan could help improve the resources your business has available. It could mean hiring more people so that you have the human resources needed to take on more clients and make more customers happy. The loan will cover the costs associated with doing that and it’ll pay for itself if you’re able to improve your profits as a result.

Fund a New Marketing Campaign

Maybe it’s the case that attracting new customers to your business is where your problems lie. It’s not always easy to get your voice heard and make people aware of why they should be taking notice of your business. An unsecured loan could be used to fund a new marketing campaign that gets your message out there and makes more people interested in your business and what it’s offering. So if you have an idea for a marketing campaign that you think might work but you don’t have the financing for it, consider a loan.


Improve with Fewer Risks

The chance to improve your business in the many ways mentioned above offers you a real opportunity that you might want to grasp. Secured loans can offer the same access to financing but come with more risks to your business. With an unsecured loan, you can reap all the rewards that come with having the cash to invest in your business without having to worry about the risks adversely affecting the business in the future. The chance to improve with fewer risks attached to that chance should not be ignored or dismissed.

The Requirements for Getting an Unsecured Business Loan

unsecured business loan

There are some requirements you’ll need to be aware of before you take out an unsecured business loan. These aren’t too harsh or restrictive at all, but they are important.

24 Month Limit

When you take out an unsecured loan from Bizzloans, you have to pay the loan back within 24 months. That’s the maximum repayment term that’s on offer. Of course, that won’t be a problem for the vast majority of businesses out there. It’s important that you look at the finances closely and decide for sure that this is something your business is going to be able to do. You’ll have a chance to do this when you get a quote from us, so you’ll know exactly what you’re signing up to.

Business Bank Statements

To ensure your business is in a financial position to take on a loan of the size you’ve applied for, you’ll need to simply submit your business’s bank statements. This allows us to ensure that we lend responsibly and don’t burden you with a debt that is too much for you to take on. It’s in both your best interests and ours that you’re able to handle the loan that you take on.

Photo ID

To ensure everything is correct and proper, and you are who you say you are, you have to submit a photo ID. This is common practice and ensures that all financial transactions are above board and in order. It’s very easy to do and needn’t be a headache for you. Once we are satisfied with your application, you’ve provided the bank statements and we’ve checked your ID, it won’t be long before you have access to the loan you applied for.

Getting an unsecured business loan for your company could be just what it needs right now. It’s a much safer option than taking out a secured loan and you’ll be accepted much faster. Don’t hesitate to get in touch with us here at Bizzloans if you’re thinking of taking out an unsecured business loan.


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