Getting a Business Loan
There are a range of business funding options available, so it can often be difficult to find the perfect deal. Comparing the market to find a competitive loan is an important step towards finding a business loan that suits your individual business needs.
We have a specialist business loan advisory team, who can help you calculate the business loan terms that you can comfortably afford.
What is a Business Loan?
A business loan is usually not secured against an asset but it is possible to obtain a secured loan. They are generally very similar to a personal loan. However, business loans are tailored much more specifically towards business use. These loans involve you borrowing a certain amount of money with a fixed or variable interest rate. You will need to make monthly repayments over the term. Depending on the size of your business, you can borrow both small and large amounts that can be repaid over shorter and longer time periods.
How to Apply for a Business Loan?
One of the most important aspects of applying for a business loan is comparing the market in order to find the right provider for you. You don’t necessarily have to take out a loan with the same provider that you bank with and many people lose out on great rates by not shopping around.
Here are some other tips when applying for a business loan:
- Know what you want - You need to be clear of this. By knowing, you can be sure you’re not taking out a loan which is unsuitable for you or for your business.
- Make sure you borrow enough - You need to make sure your loan is covering the costs of your business. Calculating exactly what money you need can be very helpful so that you’re not left with a shortfall as applying for more loans on top can become expensive.
- What works best for me? - You also need to consider terms, what kind of repayment term is going to suit you best. What kind of interest rate will work for you – a fixed rate of interest will always remain the same and so is easier to budget for but a variable rate will move with the England Base Rate. These factors should depend on your business strategy so that you’re comfortable with making repayments.
- Be Ready- Have your business strategy ready to show the bank. They’ll need to know what you plan to use the money for, your proposed repayment plan and how you plan to do so.
- Check your credit – Banks will run a credit score so you can save time by making sure yours is up to scratch before going through a lengthy application process.
If you are thinking of taking on a loan of any type you need to consider that loans are a long term commitment that usually take years to fully pay off. You therefore want to ensure you are getting the best loan you can to suit your specific needs.