5 Ways to Spend Your Start Up Loan

If you’re considering setting up your own business, one of the most important parts of your business plan is how you will fund what you want to do.

Taking into account the amount of money that will be coming in at the start, many businesses choose to borrow funds to either get started or to ensure that they will be able to keep going in the crucial first few months.

A Start Up Loan is particularly useful if you need money to cover your costs whilst you fulfil a contract or order which has guaranteed income at the end of it – particularly if the income will give you a higher return on investment than the amount you have borrowed.

Once you have a loan, what should you do with it?

The types of things that start ups often spend their loans on include:

1. Equipment and technology

Whether you’re setting up an agency or a distribution company, you could need all sorts of equipment in order to be able to actually carry out the work that you need to do.

This may include machinery, computer equipment, design software, vehicles and tools, to give just a few examples.

However, once you’ve bought these things, they’re an investment and something that you’re unlikely to need to re-purchase for a long time (especially if you make sure that they are insured).

2. Inventory and supplies

In order to sell something you of course need to have something to sell.

Whether you’re manufacturing goods yourself or purchasing them to sell on, you usually need capital to buy these items or the components to make them before you can start selling them.

You may also find that you receive orders for more items than you have available to sell, which will mean that you need to create/purchase extra goods or material before you can meet the demand.