Small business owners often juggle multiple priorities: hiring staff, managing customers, paying suppliers, and keeping the lights on. Even the most profitable businesses face challenges when it comes to cash flow and growth capital.
According to the Federal Reserve’s 2024 Small Business Credit Survey:
- 59% of small businesses reported experiencing financial challenges in the last year.
- 44% applied for external funding, with working capital and debt refinancing as the top reasons.
- Among those who sought financing, only 53% received the full amount they applied for.
The good news? In 2025, there are more funding options than ever—ranging from traditional bank loans and SBA programs to fintech lenders offering streamlined online applications. The key isn’t just getting the money, but knowing how to use it strategically.
Here are five smart ways to put small business funding to work in 2025:
1. Expand Your Operations
Growth is often capital-intensive. Whether it’s leasing a second location, hiring employees, or purchasing specialized equipment, expansion typically requires an upfront investment.
Why it matters: Businesses that expand wisely see long-term gains. A U.S. Chamber of Commerce study found that small businesses that invested in expansion reported a 30% higher revenue growth rate than those that didn’t.
Smart use of funding: Secure financing before you’re at full capacity, so you can grow steadily rather than react to bottlenecks.
2. Upgrade Your Technology
Technology is no longer optional—it’s the backbone of modern small business. From inventory management systems to customer relationship management (CRM) platforms, the right tools improve efficiency.
Why it matters: Research shows 82% of small businesses using cloud-based solutions report lower operating costs. Those same businesses are more likely to scale successfully.
Smart use of funding: Invest in tools that directly save time, automate processes, or improve the customer journey.
3. Build Your Marketing Power
In tough times, marketing budgets are often the first to be cut—but that’s a mistake. Marketing is an investment, not an expense.
Why it matters: A survey by the CMO Council found that small businesses that increased their marketing spend during economic uncertainty grew up to 3x faster than competitors who scaled back.
Smart use of funding: Allocate money to high-ROI strategies like targeted digital ads, SEO optimization, or content marketing that builds long-term brand equity.
4. Manage Seasonal Cash Flow
If your business has busy and slow seasons (retail, hospitality, landscaping, etc.), consistent cash flow can be a challenge.
Why it matters: Nearly 38% of small businesses report cash flow as their biggest ongoing concern (QuickBooks Small Business Survey, 2024). Access to funding ensures you can cover payroll, inventory, and rent—even when revenue dips.
Smart use of funding: Use lines of credit or short-term financing to bridge the gap, rather than straining operations during slow months.
5. Launch a New Product or Service
Innovation drives competitiveness. Rolling out a new product line or service often requires upfront costs—design, production, marketing, and distribution.
Why it matters: Businesses that innovate are 50% more likely to increase revenue year-over-year (Kauffman Foundation, 2024).
Smart use of funding: Pilot the product on a small scale, test the market, then use financing to scale up once demand is proven.
Final Thoughts
Securing business funding isn’t just about plugging holes—it’s about strategic growth. By using capital to expand operations, modernize systems, fuel marketing, stabilize cash flow, and innovate, you can position your company for long-term success.
Ready to explore funding options?
Compare lenders and find financing that fits your needs with my partner National Business Capital.