How to Scale Your Small Business This Festive Season with a Business Loan?
Synopsis: Small businesses need to plan months ahead to successfully capitalize on the festive cheer, which can entail a substantial amount of capital. Hence, we explain why it is a better option to fulfill this demand for capital through a business loan.
With the festive season around the corner, consumer demand is sure to rise, as are the profits of small businesses – if they have planned well in advance for the festivities.
While small businesses have plenty of avenues to tap into for funding their operational needs, getting a business loan right before the festive season is the best option of them all. This is because small business loans are usually provided for a short tenure, which makes them an ideal choice to ride the festive peak.
Small businesses can typically opt for a business loan or an MSME loan. These loans can be utilized by enterprises for multifarious uses, including meeting working capital needs, financing business expansion, and spending on technology upgradation. Small businesses can apply for a business loan and an MSME loan at Protium.
So, now that we know why getting a business loan is a better option for your small business, let’s understand how a small business loan can assist you during the festive season.
Loans for Business, This Festive Season
Below, we elaborate on how a business loan can assist you during the festive season.
1) Shoring up of Inventory
Small businesses need to stock up in time for the festive season as it is usually accompanied by peak consumer demand. They can also use this time to introduce their customers to new products. Undoubtedly, a lot of capital is blocked temporarily in their inventory before the holiday season kicks in, which can adversely affect their turnover cycles and cash flows.
With a business loan, small enterprises can streamline their working capital cycles. This has become even more vital with the burgeoning of small businesses that have been vying for customers’ attention on the back of their innovative designs. MSMEs, especially wholesalers and retailers, must tap into this euphoric purchase sentiment to make up for the losses, which are incurred during seasonal dips.
2) Sourcing New Equipment
A small business that is engaged in manufacturing products will need to source more plant & equipment to rake up its production before the holiday season begins in full throttle. They may also incur additional repair and maintenance expenses to improve operational efficiency. A small business loan can enable these manufacturers to easily meet these investment requirements.
3) Keeping the Lights On
Small businesses that are already starved of cash may find it harrowing to meet other operating expenses before the holiday season kicks in. This is because a considerable sum of money is already blocked in shoring up inventory and machinery.
Hence, with a sanction of a business loan, small enterprises can completely focus on revamping their production, without getting worked up about the lack of sufficient funds for meeting day-to-day operations.
3) Debt Consolidation by Refinancing
Generally, small businesses tend to borrow from informal lenders at atrociously high rates of interest to prepare for the holiday season. Even if borrowing formally, such companies may run up huge credit card bills while planning for the oncoming festivities.
In such cases, it is better to apply for a business loan. This is because a small business loan is usually extended at comparatively lower rates of interest, which minimizes costs. This way, MSMEs are also assured of deft debt management.
4) Marketing and Advertising
A festive season is the time of the year when customers are on the hunt for significant discounts. As a result, being front and center of a customer’s consciousness at all times becomes paramount for small businesses. Not only is this season the best time to attract more customers, but it is also the best time to build loyalty in your existing customers.
By availing of a small business loan, enterprises can apportion a part of the sanctioned loan amount towards effective marketing and advertising. That way, they can build up their brand’s presence, advertise their core products, and convert ‘mere onlookers’ into customers.
5) Automation
With tech-driven business models becoming ubiquitous, many small businesses have taken to automating their processes. A festive season accords these companies an opportunity to collect data on their customers’ preferences and spending habits. By employing data analytics and machine learning (ML) techniques, small enterprises can better serve their customers.
This also provides them with insights into operational improvements. However, digitalizing all business processes can be expensive, and that’s where a business loan can come to an MSME’s rescue.
6) Building a Business Website
Small businesses should invest in advertising—particularly in digital marketing. By creating a website, MSMEs can better advertise their products and elaborate on their USP. It also gives a sense of credibility to their business, which is very important for a new enterprise.
However, building a fully functional interactive website can be an expensive affair. Nonetheless, MSMEs should undertake this fruitful exercise as it will keep them front-of-mind of the customer, which can convert into higher sales. Small companies can apply for a business loan to fund their creation of a digital presence.
7) Tax Exemptions
Under the Income Tax Act, small businesses can claim deductions on the interest payments of the business loans availed. Such deductions reduce a small enterprise’s total taxable income, which has most likely increased manifold during the festive season, thereby bringing down the tax liability. This also prevents excessive cash outflows for making tax payments, thus keeping a company’s financials healthy.
Let Protium Help You Boost Your Sales This Festive Season
To summarize, small businesses can utilize their loans for a plethora of purposes. From ramping up their production to providing better after-sales services based on data analytics, business loans can enable MSMEs to transform their business models and grow substantially.
So, wait no more and apply for a business loan at Protium. We offer business loans of up to Rs. 5 crores with no credit history or collateral requirements. Reach us out at 8828827800 to know more!