A guide to business loans
It's an unfortunate fact that new businesses often fail within their first year. More often than not this is
because of a lack of viable funding and not because of a poor product or unfeasible business plan. New ventures
take time to get off the ground but during these initial weeks, months or even years the business still needs
capital to proceed through the early stages of company life. Small business loans generate this initial injection
of cash but are often ignored because they are considered too difficult to obtain or a company would rather survive
on its own two feet.
How to get a business loan
This is actually a surprisingly easy topic to cover. It is more complicated than simply completing an
application form and submitting it to your bank manager, but it needn't be as complicated as a lot of new business
owners believe it to be. New businesses need a convincing and compelling business plan, whereas an established
company should present detailed financial records going back three years. As well as this it will also be necessary
to detail the loan itself including the amount you wish to borrow, the period you wish to borrow it for, how much
you will repay and any collateral you will be using.
Loans for start-ups are the most common form of credit. The money can be used to purchase equipment, pay for
sales visits and even hire staff but you must detail exactly how, when and where you intend to spend the money.
Unsecured business loans are more difficult to get because banks would rather you had some collateral in the event
that you were unable to repay the loan. These and other factors will, eventually determine your business loan
rates, as well as your application success or failure.
Using business loan brokers
Business loan brokers have access to many deals from various companies and can often help you to achieve the
best possible business loan rates for your circumstances. Brokers also have regular access to companies that are
offering a special on business loans in the uk and can even help you obtain a business loan with bad credit. There
are other options available to financially aid any business.
Other funding possibilities: Government loans
Government business loans are generally more difficult to obtain than a small business loan but they do offer
preferential rates and repayment terms if you are successful. Applying through a small business association means
that if you are successful in your application, the association acts as a guarantor to your loan.
Other funding possibilities: Venture Capital
If you are lucky you may be able to find a venture capitalist willing to invest in your company for a relatively
short period of time (usually up to ten years) in the hope of making five or ten times their investment back in
that space of time. The "application" for venture capital isn't as rigorous and steadfast as with a bank loan but
venture capital is only usually available to relatively young companies with a sound business plan.