The best use of an advance is one that pays for itself. Before you apply, it helps to know exactly how the money will bring in more than it costs.
Uses that tend to pay back
- Equipment: add capacity, replace aging machines or bring outsourced work in-house.
- Hiring: add technicians, staff or a salesperson so you can take on more jobs.
- Inventory: stock up before your busy season or buy in bulk at a discount.
- Larger contracts: cover materials and labor up front so you can say yes to bigger orders.
- Marketing: fund campaigns that bring in new customers and steady revenue.
- Expansion: open a location, add space or upgrade your storefront.
Uses to think twice about
- Covering ongoing losses without a plan to fix the cause
- Long-term purchases like real estate, which suit longer-term financing better
- Paying off one advance with another
A simple way to test the idea
Say a $60,000 piece of equipment lets you take on enough new work to add $15,000 in monthly profit. Over seven or eight months, that's well over $100,000 in added profit against a total funding cost of about $20,000. The numbers will be different for every business, but the test is the same: will it bring in more than it costs, and how soon?
Three questions before you apply
- Will this investment bring in more than it costs?
- How soon will it start producing revenue?
- Can your business comfortably handle the daily payment during a slow week?
If you're not sure, ask us. We'd rather help you structure the right amount than fund the wrong one.
This example is for illustration only and is not a projection of any business's results.