Business Loans Explained
Is A Business Loan Right For Me?
If you are starting out or wish to expand your business then one of the hardest parts can be finding the finance to do this. There are different finance options for different businesses however for many a business loan could be exactly what they need. If you are looking to research the different funding options available to you then a business loan is something worth considering.
Who Can Get a Business Loan?
When a business applies for a loan, the lender will look at both your personal financial situation and that of the business. Much like a personal loan, they’ll take into consideration your credit history. You’ll also need to show a copy of your business accounts and/or any business plan you have. This will depend on the stage of your business and how established you are.
Applying for A Business Loan
If you do decide that a business loan is the right choice for you, it is best to be as organised as possible. Although a business loan can seem like the ideal solution, any lender will want to know how you manage your finances and how you intend to ensure you can repay the loan in the agreed timescale. By making sure you have all of the paperwork you’re likely to be asked for ready, you can help speed up the process which can mean you get the much-needed finance sooner.
Choosing The Right Business Loan For You
Much like a personal loan, there will be different lenders who offer different finance options. These will all be suitable for different business needs, so it is wise that you shop around and make sure you get the right loan for you and your needs.
Shopping around for quotes is a good idea because this lets you know what is on offer for you. Once you know what your different business loan choices are you are much more able to make an informed decision.
Different Types of Business Loans
There are four main types of business loans that you’ll be able to choose from. These are:
Secured Business Loan –This is where your loan is secured against something in case the loan is not paid. This can be secured against whatever is business purchased or a personal guarantee, including putting your own home up as a security option against your loan. These generally allow you to borrow larger amounts of money, but it is worth considering that whatever you put up for security will be lost if you don’t keep up your repayments.
Unsecured Business Loan – This allows you to take out a loan from a bank, building society or lender. The loan is unsecured but the amount you can borrow and the interest rate you pay back at will depend on your credit score and the creditworthiness of your business.
Peer-to-Peer Lending – This allows you to join a peer-to-peer platform and borrow from individuals that have signed up the platform to offer the facility. There can be some restrictions on this, so you do need to do some research and ensure it is the best thing for you.
Government-Backed Start-up Loans – Not many people know, but the government offer different loans and grants to people who want to start a business. The rate you pay is often low but the longest you’re able to lend an amount over is five years, which isn’t always enough if you’re looking to borrow a large amount.
Coronavirus Business Interruption Loans (CBILS)
As you might imagine, with Coronavirus being so prevalent over recent months, the Government have also launched several finance options and initiatives for business to apply for.
Here at All Star Funding, we are able to help you apply for the right lending solution for you. Get in touch with us to discuss your needs and we’ll help you find the right option for your business.
UK Businesses only
Please click below or call 0161 8211478 to speak with one of our specialists.
In conclusion as members of the Financial Conduct Authority you can be assured of a great service.
Some of our specialist areas of Finance are:
- Asset Based Lending
- Asset Finance
- Business Loans
- Cashflow Finance
- Invoice Discounting
- Single Invoice Finance
- Trade Finance
- Stock Finance
- Credit Insurance