Should you borrow to grow your business?

You’ve started your own business and you’re doing well. This is a huge achievement and a dream for many people.

So how do you keep growing without damaging your hard work? How can you expand without taking on too much debt and leaving yourself exposed if things doesn’t go to plan?

These are tough, reasonable questions but finance providers do not always answer them honestly. When it comes to business funding, there is a lot of misinformation trying to encourage borrowing when you might not be ready to grow your business. Stability needs to come first.

Here are some of the key things you need to consider before taking on growth finance.

What’s the opportunity?

You need to be realistic about the opportunities you’re chasing and whether they would be a good fit for your business.

Make sure your business goals are underpinned by solid projections and a reliable sales pipeline. You should never take growth finance and just hope for the best.

How realistic is your growth plan?

A plan is key. Avoid taking growth funds, then not following a defined growth plan and absorbing the funds into the business. Try to work up a schedule that shows when and where the funds will be invested and the impact on your business’ cash flow. There are plenty of cash flow modelling tools online that can help you do this quickly and easily.

What’s the worst-case scenario?

Run the numbers and make sure you understand what happens if your anticipated growth doesn’t materialise. Will you survive if the return is much lower than you hoped? A good business owner knows how to effectively balance risk and reward and always plans for the unexpected.

Have you evaluated all options?

Don’t rush into taking out a loan. Some providers might try to encourage you to take that step before you’re ready. There’s a lot of choice and a lot of competition out there. Make sure you’re being advised fairly and honestly – especially when it comes to fees.

How we help

FSB Funding Platform can help you to consider different funding options. We can help you find the right funding for your business and if the time isn’t right, we won’t push you into taking the step into finance when you are not ready.

We’re 100% independent. Our only interest is in making sure you get the right funding option for your business need.

Want to know more? Speak to us about funding your business.



Guy Bridge

Guy Bridge

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