Need Office Expansion? 6 Smart Capital Solutions to Try

Organizing an office expansion requires considerable planning and logistical work.

Besides the logistics of building or purchasing an expansion, your company will also need to figure out how to finance this growth. Office expansions require liquid capital to finance new real estate, labor, construction, and other expenses. 

An office expansion is an important step to take to provide room for your growing company and show potential clients and partners that you are putting your best foot forward. Here are some capital solutions that can help make this expansion possible.

Look Into Lines of Credit Designed for Businesses

The simplest capital solution for an office expansion is to find a line of credit that meets your business’s needs. For an office expansion, your best bet is an unsecured line of credit. You shouldn’t be taking out such a significant sum of money that you need to secure it with your assets.

Make sure that the lending institution you go to offers fair rates and has a reputation for fairness. One common problem businesses face according to Office Capital Group is finding lenders that offer fair rates and monthly payments for business loans. Going through a reliable capital group that vets lending partners can help you avoid this trap.

When taking out a line of credit, make sure that the loan amount covers your office expansion so you don’t fall short of the project’s expenses. 

Use Your Own Funds

The simplest way to finance an office expansion is to use the money your business has already earned. 

Many companies use their retained earnings, or the money earned from their profits, to finance expansions of all sorts. It is a good idea to have a pool of retained earnings at all times to cover capital projects such as this one or emergencies. 

However, office expansions cost a lot of money, and it often isn’t realistic for a company to hold onto so much money when they have other financial obligations to meet. That is why there are other capital solutions available for expansion.

Apply for Grants

Depending on your field, you may be eligible for government grants that can help you cover the cost of expanding your business. The federal, state, and local governments have grant programs that help out small businesses or organizations, often for better terms than you would get from a commercial lender.

However, not all offices are eligible for government grants, which tend to prioritize non-profits over regular businesses. Government grants are also slow and dependent on political will, which makes them an unreliable source of capital.

Start a Crowdfunding Campaign

If you have a large audience and a scrappy brand, you can try crowdfunding to finance an office expansion. Many successful businesses have grown from scratch thanks to crowdfunding campaigns.

However, crowdfunding campaigns work best for small companies in creative or creative-adjacent fields. Larger companies may struggle to garner enough sympathy for a successful crowdfunding campaign. In some fields, crowdfunding is seen as unprofessional.

Raise Equity Funding 

If you’re ready to go public, you can use the equity funding that you would raise from this campaign to finance your office expansion. Even if you’re not putting your company up for public trading yet, selling stock or shares in your company to trusted partners is a way to gain equity funding without going through traditional lenders.

Of course, this solution is only available to businesses that have stock and shares to trade, which excludes most small and medium businesses that may still need expansion.

Seek Investor Funding

If you’re a startup looking to finance an expansion, one option that you have is to go through another fundraising round. You can use some of the funds that you get from an angel investor, incubator, or other source of funding to expand your office. 

An office expansion on its own is not a compelling story for investors, so you will have to package it with the rest of your business growth to find investment. 

Building a New Office for Your Company to Grow

There are several options if you need capital to finance an office expansion. You can find an investor, try applying for government grants, or sell equity in your company, just to name a few. Not all of these options work for all businesses. 

The simplest way to finance an office expansion, no matter the size or industry of your business, is to apply for a line of credit. Look for reliable lenders that offer favorable terms and monthly repayment plans to businesses.