By In an ideal situation, the natural progression for any business is expansion. And, as a business owner, you must be able to capitalise on the opportunity when it comes. Typically, business expansion involves upgrading the infrastructure, hiring a new and more efficient workforce, increasing working capital, etc. For all these, you may need sufficient funds. However, to expand the business, you must not dig into your savings; this may not be the most viable option.
So, if you are looking to expand your business and lack funds, you can apply for a business expansion loan or leverage your business assets and get a loan against property. The latter allows you to raise a sizeable amount of capital and get the funds at a competitive interest rate.
A loan against property or LAP loan allows you to meet your monetary needs, recover the cost of borrowing from the profits you earn, and enjoy valuable tax benefits. However, securing the loan against property for business is only the first step. You must also know how to use the loan and expand your business.
This guide discusses the different ways you can use the loan against property or LAP loan for business expansion.
Upgrade the machinery to increase the production
If you own a manufacturing business, machinery would be your most valuable asset. Its quality and efficiency will have a direct impact on your output, i.e., the number of units you can manufacture or produce.
So, as part of the business expansion process, you can consider replacing the old and outdated manufacturing machines with new and advanced ones. Utilising and embracing new technology is the key to surviving the extremely competitive modern business world.
By replacing the old machinery, you can simplify the production process, make the process more efficient, and possibly even produce more units in the same time. New machines also have a lower risk of breakdown, which can positively affect the output and reduce waste.
However, buying new machinery to boost manufacturing or modify the existing one can be quite expensive. The cost can easily run into several lakhs, depending on the number of unit of machinery you want to buy. Nevertheless, you can commit yourself to upgrading the machinery and expanding your business by getting a loan against a property mortgage at the most affordable interest rate.
Expand the workforce
When you think of upscaling your business operations and increasing productivity, you may have to hire new employees and bring in more efficient members over time. Having said that, hiring experts and people with many years of experience and proven ability often comes with a cost.
When you increase the workforce, you would have to pay them wages and compensate them appropriately for their expertise. But you can apply for a loan against property with a reputed mortgage lenders, bolster your working capital, and cover the expenses.
Purchase or stock inventory or raw materials
This is another significant benefit of a loan against the property; it gives you the required funds to purchase new inventory or raw materials or stock up the materials. So, suppose you own a business in the production sector. In that case, improving the quality of the raw materials directly impacts the final output.
However, buying and stocking superior-quality inventory or raw materials is insufficient. You would also have to consider the storage and handling expenses for these materials. That is where getting the LAP allows you to have sufficient funds at hand to manage these expenses without any hassles.
Invest in R&D
When you think of business expansion and business expansion loan, you may need funds to invest in the research and development. It is an integral and critical part of the expansion process, as it allows you to offer newer and better products and services to your existing and potential new customers.
However, depending on your business, R&D may involve a hefty cost. To keep these improvements running smoothly, you can ensure that your research endeavours are well-funded through a loan against property.
Marketing your business
Business expansion and adopting aggressive as well as innovative marketing go hand-in-hand. You must have a prudent market strategy to take your business to the next level as you desire. However, marketing and getting the best minds to get the word out about your company can be costly. For example, if you do a targeted marketing campaign, it can prove to be very profitable, but at the same time, its cost can run to lakhs.
Thankfully, you can easily meet these expenses by applying for a loan against property for business and enjoying benefits like same-day approval, flexible repayment options, etc.
Final Word
So, there you go. There are different ways you can use a loan against property for business expansion. When you apply for a loan, the easy online application process, minimal documentation, and easy eligibility give you a hassle-free borrowing experience.
