Small Business Loan

Small Business Loan Services

Our service provides finance solutions for:

• Unsecured business loans – Finance up to £250,000 from 1 to 5 year terms

• Working capital business loans –  Solutions from 1.10% per month.

• Bridging finance - From 1 to 24 month terms from 0.49% pm

• Asset finance - We have access to a wide range of asset finance lenders

Can my firm apply for a business loan?

Any company can apply for a business loan, regardless of how big or small they might be providing that you are VAT registered and you meet the minimum monthly turnover.

As there are a range of business funding options available, it can often be difficult to find the perfect deal for your firm. Our specialist business loan advisory team help take the strain in finding the right finance solution for your business.

Call us today on 0117 313 8872, for a free initial consultation or complet the enquiry form above.

What is a small business loan?

The term small business loan covers a few different types of financing which can be offered to companies to fulfil different objectives they might have.

Many lenders are able to give you access to this type of product, and some even specialise in providing these loans.

Over the last few decades, different types of small business loan have developed. Each one has an individual purpose designed to help entrepreneurs accelerate their venture and deliver on their goals.

Therefore, the way a small business loan works depends on the type of product you decide to pursue.

Which types of loan are available to small businesses?

With so many different options available to small business owners seeking funds, it can be hard to know where to start looking.

To help streamline your search, we’ve outlined some of the most popular options.

Business line of credit

Essentially, a business line of credit operates in a similar way to a credit card. 

It can give your business unrestricted access to funds, up to a certain limit agreed between you and the lender. This makes this type of loan transparent and easy to use.

With a business line of credit, you’ll be able to withdraw cash whenever you need it, and you’ll only need to pay interest on the amount you use, as opposed to the total amount which is available to you.

There are different ways of configuring a business line of credit, and this can be useful if you have specific cash flow requirements which are unique to the way your business operates.

Some lines of credit are designed to expire after a certain period, whilst others can be renewed on a revolving basis.

With the latter, you are allowed to reuse any cash in the account once you’ve repaid it, without the need to reapply.

This can be useful if you’re likely to need a consistent stream of credit to support your business in reaching its full potential.

Accounts Receivable Financing

You may have heard of accounts receivable financing, invoice financing, factoring, or merchant cash advances whilst doing your own research on small business loans.

These are popular methods which business owners can use to manage their cashflow and remain in liquidity. But what does it really entail?

Accounts receivable financing is the practice of you, a business owner, selling your receivables or any outstanding invoices to a lender.

They will pay you cash for them up front so you can secure early payment.

This can be a great help to companies who might be struggling in a period of stagnant trade and slow-paying clients.

Through this financial tool, the lender will take on the risk related to your receivables, providing your business with the funds you require from the invoice.

They will provide this service in exchange for a fee.

The age and perceived quality of the receivables you can offer a lender are likely to have an impact on the sum of cash you'll receive as part of this arrangement, so it’s crucial to bear this in mind before approaching a lender who can facilitate this arrangement for you.

Ultimately, instant access to the cash you’re owed is a huge upshot of accounts receivable financing.

However, it’s important to consider the fact that you're likely to end up paying more for this type of financing than other loans you may find on the market.

This is especially true if your business’ credit record is less than perfect.

And if the money you’re owed from invoices doesn’t come through, you’ll still need to repay your lender either way, so it could lead to building up debt if you’re unable to manage your businesses finances effectively.

Equipment Loans

Nowadays, many businesses require less equipment than they did ten years ago.

With the rise in digital products, remote working, and use of the cloud, many companies are eschewing the office or factory in exchange for a more flexible, home-based model.

However, there are still many firms who prefer to operate the old school way, or have a flagship product which requires vast amounts of equipment to manufacture.

If your business falls into the latter category, equipment loans are on hand to help your small business replace or upgrade existing equipment, or even purchase duplicates of the kit you already have as demand for your product grows.

For instance, if you're expanding your food business, you might take out an equipment loan to pay for items like vat cookers or packaging machines.

In most cases, equipment loans require much less documentation to get the arrangement over the line in comparison to other small business loans.

This means that when you’re in need, you can receive the cash you require pretty quickly.

Short-term business loan

If your business is facing the prospect of covering emergency expenses, you could consider taking out a short-term business loan to front the costs.

Let’s face it, life happens, and you may need to cover repairs of your HQ, purchase new equipment, or finance payroll in a time of cash flow difficulty.

Short-term business loans can afford you a much-needed financial boost if you require quick access to funds to promptly address an issue you’ve encountered.

A short-term business loan might also come to the rescue if your company is offered a promising contract or opportunity, but you’re in need of some surplus cash to seize it with two hands.

Whatever your rationale for taking out a short-term business loan, it’s always sensible to make sure you’ll have enough money in the coming period to repay a lender.

If you’re unsure of exactly when you’ll have the cash to reimburse the sum of the loan, with interest, it may be wise to look into funding options which carry a less strict repayment schedule.

Can I get a small business loan as soon as I start my business?

One of the biggest obstacles prospective small business owners face is gathering the necessary capital to actually start trading.

Then, once you’ve established your business, you might be short on cash and anxiously waiting for customers to begin paying for your product or service.

This can be an unnerving time for a new entrepreneur; however, all is not lost. Fortunately, it’s possible to obtain a small business loan soon after starting your business.

Your success in getting a loan at the beginning of your venture will hinge on a few factors.

Whilst some lenders require your business to have been operating for a certain period of time before considering your loan application, others will be more willing to give funding to a newly established company.

In fact, there are some lenders who specialise in exactly that!

When reviewing your application for a small business loan, lenders will normally evaluate various aspects of your proposition.

They’ll take into account things like your business plan and its quality, your financial projections, the credit history of your or your partners, and any collateral you can offer a lender to lower their risk.

Since your business is brand new, you aren’t likely to have a very extensive track record of good financial behaviour.

As this is usually the main factor which lenders take into consideration, they might scrutinise other factors of your application more closely than they would if you were an established firm.

There are a few things that you can do to make your application more appealing to a lender, even if your business is the new kid on the block.

• Creating an articulate and detail-oriented business plan is a great way of upping the odds on a successful business loan application. You can use the document to outline your business concept, show you understand your target market, and make those all-important financial projections. A solid business plan can also demonstrate your ability to generate revenue to give lenders confidence.

• Since your business will be lacking an established credit record, lenders might use your personal creditworthiness to make a judgement as to whether you are eligible for a loan. You can maintain a good credit score by paying all bills promptly, reducing any outstanding debts, and managing your personal credit use in a responsible fashion.

• To boost the economy, the UK government provides a number of initiatives and programs to offer support to new and existing small businesses. Things like loans, grants, and guarantees are at your disposal to get your venture off the ground. Researching the plethora of government-backed schemes like the Start Up Loans Company or the Enterprise Finance Guarantee scheme will help you to explore potential options which you can take advantage of.

• Aside from traditional bank loans, there are a wealth of alternative financing options to explore. Crowdfunding is popular among small businesses, as are angel investors, venture capital companies, or the practice of peer-to-peer lending. These institutions are likely to be more willing to offer financial support to early-stage companies than traditional lenders, as they have a higher appetite for risk.

• Establishing good relationships with local banks and lenders is a good way to boost your chances of getting approved for a loan. Engaging with potential funders before you need an influx of cash is the best approach to take. You could attend local networking events, join any business associations in your area, or open channels of dialogue with financial institutions. All these activities help small business owners to build rapport, as well as to gain valuable insight into each institutions lending criteria. 

Whilst it’s easy to get ahead of yourself, it’s vital to remember that loan approval is not necessarily in the bag, especially when it comes to new business ventures.

For this reason, it's essential to conduct your own thorough research surrounding any potential lenders and take the time to understand their specific eligibility requirements.

By approaching the matter diligently, you can put yourself in a good position to prepare a compelling loan application which highlights your company’s potential for future success.