6 Things You Need To Know About Financing Your Advertising Expenses

Financing your expenses can be useful for your business no matter its size or industry. You can finance nearly any type of business expense, but some of the most commonly financed expenses include equipment acquisitions and property rentals or purchases. It’s becoming increasingly common to also finance other expenses, such as advertising and marketing. Here are six things you need to know about financing your advertising expenses.

1. Research Your Options Carefully

Before making any decisions, you must conduct careful research. Understanding your marketing and advertising needs, including budget, materials, equipment and staffing, will help you make appropriate decisions regarding your advertising expenses. First, determine your financing needs. Then, you can review the options available to you and compare them to find the option that is the best fit. For example, if you’re interested in RHO banking, it’s important to review its pros and cons and compare it to your other options to see whether it’s the right choice for your business.

2. Keep Uncertainties in Mind

Marketing tends to have a relatively high level of uncertainty because of how many unpredictable and uncontrollable real-world factors are involved. Make sure you plan for uncertainty and work flexibility into your advertising budget and financing options. You should provide explanations and risk assessments to managers and lenders so everyone involved in your advertising is prepared for abrupt changes. 

3. Stick Closely to Your Marketing And Advertising Budget

No matter what you’re planning to use financing for, make sure you factor it into your budget and then stick closely to that budget. This will help ensure you don’t exceed your daily, monthly or annual spending limit. It will also help you avoid compiling more debt than is healthy for your business. Remember to review your marketing and advertising budget regularly so you can adjust it if necessary.

4. Learn the Benefits of Advertising Financing

There are three main benefits to financing your advertising costs. The broadest benefit is that it can increase the speed at which you see marketing results. This means you don’t need to wait for funding to start or expand an advertising campaign and you can conduct data analytics more quickly. Financing your advertising can also increase your business’s revenue. With financing, you have more room in your budget for trial and error when you design and roll out advertising campaigns and it’s easier to scale campaigns. The third main benefit is the ability to increase awareness of your brand. Financing increases your funding and allows you to expand current campaigns or develop new campaigns to reach wider audiences more quickly.

5. Understand How Much You Should Spend on Your Advertising

Advertising is only one aspect of marketing, so you need to understand how to budget its expenses within your marketing budget. Advertising expenses need to be balanced with other marketing-related expenses, including customer acquisitions, sales and communications spending and branding. Different companies will have different budget breakdowns. One business may spend more on advertising while another may need to set aside more funding for sales and communications. A business’s marketing budget may also change over time.

6. Know Your Financing Options

There are several financing options available for advertising and marketing. Some of them may be advertising-specific, but many are more generalized. Some, such as small business loans, can be used for any business-related expenses but are only available to businesses that meet specific criteria, such as size. The most common sources of advertising financing include venture capital, revenue-based financing, business cash advances, business lines of credit, term loans and business credit cards. Depending on your business’s needs, you may choose one or more financing options.

If you plan to finance your marketing or advertising expenses, you need to decide whether you want to develop a specific financing plan or fold it into your current financing and credit plan. Make sure your budget and marketing plan are compatible with the financing option or options you’re interested in.