Business Loans

If you're looking for a competitively priced business loan we can help. Below you will also find a little bit more background information for which to consider before you apply.

How are business loans used?

Over recent years, an increasing number of people have been moving away from the traditional employment route of working for a large organisation and becoming self employed, starting up their own business. Whilst this is often an attractive option in the long term, many would be business owners are deterred by the sometimes high start up costs; they may need to purchase stock, find premises to work from, or need to spend money on tools or office equipment.

A business loan is a common method of funding these initial expenses for people who do not have sufficient capital available to fund themselves. Business loans can also be useful for more established businesses who are wishing to develop or expand their business. Whilst it is usually easier for an established business to obtain a loan, due to the fact that they already have a proven track record and company accounts to back up their plans, it is still possible for a new business which is just starting up to be accepted for a business loan, although they may not be able to borrow as much as an established firm and the interest rate payable could well be higher due to the increased risk levels for the lender. Before agreeing to a business loan, any lender would require evidence that the business is viable and want to know the reasons for any additional funding, regardless of the size of the business.

A business loan can be used for any legal purpose within the business in question, whether it is for start up costs, expansion or development, or refinancing existing business debts to reduce monthly costs and improve cash flow.

The availability of Business loans

There are several providers in the market place who provide business loans. Most business owners tend to approach the main high street banks in the first instance when they require additional funding. Certainly banks will be happier to lend to a business which holds its main current account with them, although banks often take a more cautious approach to business lending and are more likely to lend to an established business.

There are also a growing number of business loan companies and centralised lenders who operate through brokers or the internet. These lenders often adopt a more lenient approach to lending and many specialise in certain areas such as new or start up businesses although they will still require evidence to support the loan, such as a detailed business plan. It is worth while researching the various options thoroughly before committing to a particular funding method and taking independent advice from one or more of the many trade and government organisations which exist to help businesses.

The different types of business loans

Business loans may take different forms, depending on the type of business and the size of the loan required. Some may be unsecured loans, usually this would be for a smaller loan over a shorter period of time. For larger loans, the lender would probably want to secure the loan on assets within the business, such as plant or property. If this is not possible, they may require certain guarantees from the Directors or principals of the company, which could include using their own home as collateral for the loan. Whatever form a business loan takes, the lender is likely to require certain documents from the company. Different lenders will require differing amounts of information prior to lending, but typically these would include items such as: a detailed business plan, personal and business financial statements, some form of security for the loan, details of the company (i.e. certificate of incorporation, limited liability partnership details or partnership agreement), accounts and tax returns where applicable, proof of ownership of the business, acceptable credit score or references and individual and company identification for money laundering purposes.

In summary, there are many different types of business loan and many lenders who are prepared to supply these to businesses of all sizes. It is important to research these options prior to applying and to take advice from lenders and independent specialists in this field. It may be that there are alternative options available to you for your particular requirements which had not previously been considered. Finally, you are more likely to be accepted for a business loan if you are organised and have prepared thorough and detailed documentation to support your application.