Every business establishment, irrespective of its industry, requires a constant injection of capital, either to continue its expansion or meet urgent requirements. Today, businesses of all sizes, be it SMEs or large-scale enterprises, have access to a wide catalogue of financial products, right from instant business term loans to revenue-based financing.
Leveraged correctly, revenue-based financing instruments can not only give a business a much-needed boost but also empower it to meet its urgent spends without costing a bomb. Thus, in today’s post, we will share with you a detailed list of all the ways you can make use of your recurring revenue capital to grow and scale your business.
Different Ways to Leverage Recurring Revenue Financing
1. Purchasing New Inventory
As a business which specialises in selling a wide catalogue of products, it is crucial that you always have your inventory stocked to meet customer demands. This is true for every business, whether you run an online FMCG store or a boutique cosmetic showroom – a well-stocked inventory is the surest way to retain your customers and attract new ones.
However, injecting fresh capital to restock your inventory is strenuous as it impacts your cash flow and increases your financial burden. A better way would be to apply for revenue-based financing and use the approved amount to restock your inventory. This way, you can ensure that your inventory is always stocked while maintaining a healthy cash flow.
2. Hire Helping Hands
One of the primary requirements of a growing business is to have enough hands-on deck such that all responsibilities can be efficiently met. However, as you hire more employees, your overheads will naturally increase, and thus you will experience a negative impact on your balance sheet. Along with this, you will need to wait for some time before you start seeing the result of hiring more people; thus, maintaining a healthy cash flow is crucial at this stage.
To address all these challenges while maintaining your business’s efficiency you can apply for recurring revenue financing. Being a business with established revenue streams, you will easily secure approval and can seamlessly use the capital to compensate your employees without additional financial strain.
3. Expanding to New Markets
Every entrepreneur dream of scaling their business and expanding to new markets. However, establishing your brand in a new region not only requires upfront investment in market research and infrastructure but also calls for hiring local help and marketing your services. All of these commitments have the potential of easily burning a hole in your pocket if not planned and executed correctly.
Ask any veteran businessman, and they will surely advise you to raise fresh funds and use the same for your expansion. However, a far better option would be to apply for recurring revenue financing, as you can not only instantly access a significant amount of capital but also preserve your equity and collateral in the process.
And the best part is you can repay the entire amount simply by sharing a portion of your future revenues. This will ensure that you manifest your expansion dreams in the most economical manner.
4. Strengthen your Brand Presence
No matter how old your business might be, there is never an end to strengthening your brand in this competitive market. Regularly investing in strengthening your brand’s presence will not only raise its awareness among your customers but will also help you consistently earn more profits than your competitors. But of course, this is easier said than done.
For starters, marketing your business both to new as well as existing customers requires consistent capital expenditure. The smart way to tackle this is by applying for a loan and using the capital for your marketing spends. However, traditional financial instruments will either require you to pledge personal collateral or share a stake of your businesses’ ownership.
Agreeing to either option is challenging, and thus the best way to go forward is to apply for recurring revenue financing and use the capital amount for your marketing spends. The best part – as your marketing efforts will bring you immediate results, your revenue-based financing will basically pay for itself.
5. Upgrading your Infrastructure
Irrespective of the industry of your expertise, it is crucial that you maintain your competitive advantage to ensure consistent success. While there are multiple contributors to this, one of the most significant is upgrading your infrastructure.
For instance, as the director of a manufacturing plant, you can gain competitiveness by investing in the latest machinery. This new investment will not only empower you with faster turnarounds but also a more efficient manufacturing process – both adding to your gain.
Likewise, as the managing director of an IT company, investing in latest technology will allow you to manage multiple client projects together while delivering each of them with a shorter turnaround. However, as upgrading your infrastructure is often a costly affair, a recurring revenue financing will be best suited for it. Because just like your marketing efforts, your upgraded infrastructure will also start generating returns immediately, making it easier for you to manage your repayments.
6. Address Market Slowdowns and Manage Other Debts
Lastly, you can use recurring revenue financing to effortlessly tackle market slowdowns and pay off your other debts. Every business, at some point in time, experiences a slowdown in demand, and during those times, entrepreneurs take on additional debts to keep their enterprises afloat. However, without careful planning and execution, this can quickly lead you to a debt trap and position your business for bankruptcy.
A smart way to avoid these hassles and ensure your business keeps thriving even in testing times is to apply for recurring revenue financing and use it to meet your overheads. The best part – repayment is as simple as sharing a portion of your future revenue. This will ensure that you do not take on too much financial strain, and you can also smoothly sail through rough patches.
The Bottom Line
Recurring revenue financing options have been designed such that entrepreneurs can find their optimum usage in a wide variety of scenarios. As we showcased above, the use case of revenue-based financing is only limited by your creativity, as its flexibility and innovative design guarantee you complete freedom over its usage.
If you are looking to apply for recurring revenue financing, click here to start your application today. Partnering with CrediLinq gives you instant access to SGD $300,000 capital, and you can secure approval in less than 10 minutes. So, wait no more and apply today.
