When is the right time to expand your business?

All businesses at one time or another require injections of cash to fund growth. This could be as part of a companies expected expansion, a response to customer demands, or simply to keep up with competitors – in an ever changing market place. One of the hardest decisions for a business to make is to decide when the time is right to invest, weighing this decision against ongoing running costs and maintaining positive cash flow.

Investment in a business to aid expansion, diversify or to fulfil demand, can come in many forms. It may be new equipment, larger premises, employing more staff, new vehicle requirements, a re-fit, or a cash injection due to seasonal trading conditions. The key question can then be, can I afford to do this now, and is it the right time to commit to more financial liability? A business needs to consider the affordability of the finance, and the impact that it will have on cash flow. Are the monthly payments affordable even if the business doesn’t perform as expected? This is important as a business’s cash flow can be influenced by external factors that may not even be realised yet.

If a requirement for additional finance has been identified, and you are confident that the business can support it, you then need to understand the potential sources available to you. There are dozens of products on the market to help you achieve your growth plans and it is important that you choose the right one for your business. We would always recommend seeking financial advice prior to committing to any borrowing to ensure transparency and understanding.

The success of your business sector can also be a factor in your decision making as it can help identify financial trends in the UK economy. The Finance & Leasing Association have released figures showing yet another year of asset finance growth. In 2017, £32 billion was provided to businesses and the public sector, representing almost a third of UK investment in machinery, equipment and purchased software in the UK last year (Source: The Finance & Leasing Association).

If you have a funding requirement for your business, get in touch with our team today to discuss how we can help. Call 01420 481500 or complete your details in the form below.

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