The importance of marketing for small business
According to the 2018 Telstra Small Business Intelligence report, the top three issues for small businesses are:
- Developing new revenue streams
- Sourcing new customers
- Increasing revenue from existing customers.
It’s interesting that marketing can play a role in solving these challenges. The research also found that only 50% of small business have a website, while 62% of customers will stop considering a business if they can’t find information about it online.
This is only one example of the gap between what small Australian businesses offer and what consumers expect, and it highlights the need for increased marketing efforts. Besides getting a website, which should be a priority for any small business, there are many other types of marketing that can help your business grow. Some of these include:
- Content marketing
- Email marketing
- Digital marketing
- Social media marketing
- Mobile marketing
- Lead generation marketing.
All of these require time and money to implement. This is where business loans for marketing come in.
Here we’ll explore some of the business loans for marketing available to help small businesses implement their marketing plans.
Business loans for marketing from family and friends
This is a common form of finance for new small businesses. If you decide on this type of loan for marketing, remember to keep it professional. Make everything clear, including how and when you will repay the loan, and put it in writing. This way you avoid damaging relationships with the people who are closest to you. For more details, read The Upside and Downside of Getting a Business Loan from Family and Friends.
Credit cards for marketing finance
Many start-ups and small businesses turn to credit cards to meet short-term business loan needs. Although it’s relatively easy to get a credit card, the interest can add up quickly if you keep a long-term balance. It’s relatively easy to get a personal credit card and use it for business. However, getting a business credit card is recommended as it is a way to build up a credit history.
A line of credit or business overdraft as a marketing loan
Business overdrafts and lines of credit are similar types of loans. A business overdraft is connected to a business transaction account. With an overdraft, you are allowed to have a negative balance on the account up to an agreed limit. You only pay interest on the funds you are using plus an establishment fee and ongoing accounting fees.
A business line of credit is not automatically connected to a transaction account and can be for higher loan amounts than an overdraft. Like an overdraft, you only pay interest on what you are using at any one time. Repayment is usually flexible, so you can repay it when you have the cash flow to do this. This way, the money you use to pay for marketing can be repaid after your marketing efforts have generated increased sales.
Bank term loan for marketing purposes
A bank term loan is what comes to mind when most people think about a business loan. This type of small business loan is usually secured by residential or commercial property. This financing option includes a lower interest rate and regular repayments. The main drawback with this type of business finance is the amount of time and paperwork required. You will need to submit financial statements and possibly a business plan. Then you need to wait for an answer which could take from a few days to a few months.
Unsecured business loans for marketing
Getting unsecured business loans online can be very quick and easy, thanks to leading-edge technology developed by financial technology companies (fintechs).
With Moula, for example, the application takes less than 10 minutes to complete. Instead of requiring large amounts of paperwork, your finances are safely and securely analysed online and you receive an answer within 24 hours. Learn more about unsecured business loans.
Comparing business loans for marketing purposes
Whichever business loan you choose for marketing purposes, remember to read the fine print to understand the terms and conditions. Additional fees and charges need to be considered to determine the true loan rate. Find out more at Unmasking APR: How to Really Compare Business Loan Rates.
You can also use our Return on Investment Calculator to evaluate the return on investment from your marketing campaigns.
