Business loans – Finance for your business

Business loans work as a source of finance for the business. Business loans are used to start a new business, expand the existing business, to buy a new machine or equipment, or for any other business-related activity. There are infinite numbers of business loan opportunities available in the market. You need to shop around and compare them to find the best deal.

Have you been planning to start a new business but lack of sufficient funds has been stopping you? You need not worry; business loans are here to help you realize your dreams.

Business loans are the loans granted for the use of a business. A business loan can be used to start a new business, expand the existing business, to buy a new machine or equipment, or for any other business-related activity. 

Business loans be a secured or an unsecured one. A secured business loan is a loan that is provided in exchange for property, machines, or plants that serves as collateral such as houses, cars, savings accounts, or bonds. The secured business loan also provides finance for working capital, which can be used to purchase raw material, paying the labour charges, etc. An unsecured business loan is granted without keeping a property as a security with the lender.  

Business loans can be taken for short, intermediate, or for the long term, it depends on you which one do you want to take and for what purpose. Short-term loans are given to businesses that need cash to start operating; this loan is granted for one or less than one year. The intermediate-term loan helps companies to buy equipments and cover large initial expenses; this is granted for a period of one to three years. Long-term loans are used to assist start-up businesses with initial costs and are granted for a period of three to seven years.

Now you would say why only, business loan when other loans are available in the market. Business loans are tailored specially for people who want funds for their business. A business loan provides the flexibility to preserve your cash and working capital. The business loan also helps in managing money effectively by offering flexible repayment options.

Capital forms an integral part of every business. If you are planning to apply for the business loan, you need to look into three key issues:

  • Cost – You need to check the cost and risk involved in taking a loan. 
  • Loan size – You need to decide the amount of loan you want that would satisfy your need. 
  • Payback Program – It is essential to determine at the time of taking a loan that how will you repay the loan amount and the monthly instalments, otherwise it may create problems for you in the future. 

You can get a business loan from a bank or a financial institution. But shop around and search for as many lenders as you can, you can also look for online lenders. Collect quotes from various lenders and make a comparison among them to get the best deal. 

When applying for a loan, you need to keep in mind that you must make a loan proposal. Lenders will grant you the loan only if they find your request worth it because no lender will be interested in taking the risk. While writing a loan proposal, you should always give industry-specific details so that the lender can know in-depth about what business do you want to start or how your present company is run and what market trends affect it. 

You should also give details about the existing or proposed business, collateral which you want to keep as a security with the lender, loan repayment plans, personal financial statement, and projection of your future operations. The possibility of getting a loan will be higher if you have a good loan proposal and can convince the lender about your future business plans. 

You can get a secured business loan if you have CCJs, arrears, or bankruptcy. Your bad credit history cannot stop you from getting the cash you needed to invest in your business or to start up your own business.

A business loan provides funds to people in business who want to expand their business or people who want to start a business of their own. Success has no limits. A business loan provides you with the funds; now it depends on you how to use this money to climb the ladder of success.

Business loan − How to acquire it

A business loan can cater to every aspect of your business. The urgent requirement of funds for your business can be catered through a business loan. It is easy to seek a business loan now a day. All you need to do is to fill up an online application form, and your application form will reach to suitable lenders. The lenders may contact you by making a thorough analysis of your application form. There are lenders in the UK who can provide you with the business loan quickly and with great ease.

Business loans are offered according to your need and business concerns. Entrepreneurs can avail a business loan for various business requirements. It can be used for purposes like maintaining cash flow, establishing infrastructure, purchasing office equipment, machinery, etc.

A business loan can be sought for small, medium, and big businesses. If you are suffering from an adverse credit history then also you can seek a loan. It can also be used to start a new business venture or in expanding your existing business.

The business loans are flexible enough for loan repayment terms depending upon the current revenue trend. A great advantage with a business loan is that you will get competitive interest rates, and your loans would be processed faster. The growing competition among the lenders in the UK will help you in getting a business loan cheaper.

With a business loan, you can attain an unimaginable profit in your business. A business loan will help you to cater to all your business needs which would be tough for you from other resources.

Don’t let funds come your way in becoming a successful entrepreneur. Seek a business loan and expand your business, the way you want.

Business loan − Business loan alternatives

Can’t qualify for a business loan? Don’t worry. Consider these easy to qualify options.

After weeks of answering questions, providing endless financial statements, and playing the “hurry up and wait” game, you find out that your banker is unwilling to give you a business loan.

Now what? Do you go to another bank and try again? Possibly. But most banks have similar lending criteria. If you did not qualify for a loan at one bank, your chances are not fair that you will be eligible for a loan at another place. However, it doesn’t hurt to try.

However, other financing products are easy to obtain – and in some instances – work better than a business loan. Here is a straightforward quiz:

Does your business:

  1. Have commercial customers?
  2. Invoice at least $10,000 a month?

Is your most significant challenge:

  1. Waiting up to 60 days to get paid by clients?
  2. Paying suppliers?
  3. Meeting payroll?

If this describes you, then you could be the right candidate for either factoring or purchase order financing. As opposed to bank loans, these two financial alternatives are easy to qualify. An essential requirement is that you do business with healthy commercial customers, such as big companies or the government.

Factoring is ideal for business owners that cannot afford to wait up to 60 days to get paid for their invoices. Factoring provides you invoice based financing, giving you the money you need to pay rent, suppliers, and meet payroll. As opposed to bank loans, factoring has no upper limits. The amount of money you get is based on your invoicing. The more you invoice, the more financing you qualify.

Purchase order financing is ideal for distributors, wholesalers, and resellers that have large purchase orders that they cannot afford to fulfil. Under a purchase order financing arrangement, the financing company pays your suppliers on your behalf and helps ensure proper shipping of the goods. The transaction is settled once you invoice your customer and they pay.

Both factoring and purchase order financing can provide you with the financing you need to take your business to the next level.

Business loans − Finding the right one

Business loans are not very difficult to come by these days as might be thinking. What with so many governmental and private financial lenders vying with each other for a share of the business loan market, there are brighter chances for businessmen and women to get one provided they have their credit ratings and documents right in place.

Small Business Loans

Small business persons feel the need for loans when they are short of investment at the time of start-up or when they find their business can do better if financed. Small companies can approach the US Small Business Administration (SBA) for loans tailored for different needs of companies.

Critical Analysis of Business Loan Needs

When it is time, you know you can’t proceed without financing either the expansion or augmentation of your business. But many conditions and issues need to be addressed critically at this stage.

  1. If yours is a start-up, it’s an uphill task as it is generally deemed that your credit history is still to develop. So much so, lenders perceive you as a risk. Financing most of it through friends and relatives plus own resources augers well initially by lowered interest burden.
  2. If the loan is for working capital, chances are better for you on the following counts. You have a credit history, credit score, possible assets for collateralization, and business experience plus ready market/orders.
  3. Business expansion loans are based on your projected growth in turnover and profit margins.
  4. Loan processing times play crucial roles in choosing loans and lenders. Choosing lenders that take longer may harm your business.
  5. A line of credit can suffice working capital needs some times. Here the rate of interest will not burden much as you pay only for the used portion.
  6. Nature of the need more or less decides the type and tenure of the loan, for example. The working capital requirement may be taken care of by line of credit; equipment or real estate purchase requires a long term loans (Basic 7 (a) loan-guarantee) etc.
  7. Also playing critically here is where you hunt for loans. Grants, SBA guaranteed loans have different interest rates, documentation, and processing than private institutions which process faster but have strict terms and conditions.

Loans benefit by retiring old debts at new, relaxed payment terms because of consolidation. If this is your intention, highlighting the different payables contrasted against each other stands a better chance. Lenders are quick to catch this point as the accrued benefits are in an unambiguous state.

Rather than anything, it is your innovativeness that opens avenues for loans. Rationalizing may even reduce the need from the original loan estimate.

Business loans − Finance your dreams

If it is the financial crisis that’s interrupting your way to start a new business, leave all your worries aside. Business loans are right here to help you achieve your goals. Read the article and find out how a business loan can help you in accomplishing your dreams.

We all have dreams. If you have dreamed of owning a group of companies or taking your business to new heights, thus becoming a successful businessperson, but it is the money that’s hindering your way. You need not worry because now you have business loans that can help you finance your dreams.

Business loans are provided to those who are looking forward to starting up a new business or expand the existing one. These loans offer entrepreneurs with enough financial assistance. 

There are several types of business loans available in the market. Start-up business loans help to start a new business. These are given to those who have a strong desire for starting a business but are unable because of the financial crisis. If you want to start with a small business and require relatively less amount, then a small business loan is the best option for you. With extensive business loans, you can make large capital investments, start a new business, and even expand the existing one.

One can avail of a business loan in either of the two forms –secured or unsecured. Secured business loans can be availed if you have something like a property or home to a place as collateral. They are given at a low-interest rate provided you have a good credit score, and the collateral holds a higher value. 

If you do not want to put a property as collateral for fear of getting it repossessed by the lender, you can opt for unsecured business loans. These are generally given at a higher rate of interest. It takes into consideration your present business volume and credit score.

Sanction of a business loan depends on factors such as the business plan, loan purpose, credit score, and the collateral placed. The loan amount can be drawn according to one’s requirements and financial condition. Usually, with a business loan, you can extract money ranging from £5,000 to £100,000. The repayment period is between 3-25 years. Keeping all these things in mind, the lender decides the loan amount, interest rate, and monthly instalments of the borrower.

The benefits of business loans are:

  • Fastest way of raising money for the business.
  • Flexible repayment options.
  • The ownership of your company is retained.
  • Tax-free interest rate.
  • A useful tool for debt consolidation.
  • Can be used for expanding or renovating premises.

The loan procedure involves a lot of paperwork, which is quite chaotic. An alternative to this is the provision of various online loan-providing organizations existing on different websites that keep you away from all hassles. Just a little effort is required to fill in the loan application form. You need to give all the relevant details required, and the lender will serve your service with the best possible deal.

Hence, now put all your worries under the pillow and make a new opening of your business plans. If you make judicious use of the loan, you can go a long way in expanding your business, thus making your dreams come true.

Business loan – Business loans in the UK

Business Loans have the characteristic of effectively consolidating business debts. Whatever the nature of the business may be, Business Loans are the type of loans to look forward to as they provide you with the necessary inputs of cash flow to keep your business in apple-pie order, and running smoothly.
When undertaking the task of establishing a business for the very first time, an owner can be faced with a lot of financial obstacles. Seeking out the right cash sources can be quite burdensome. Drop the idea of acquiring government grants and various other agencies. This will only inhibit the process of acquiring the necessary cash inputs and hence, slow down the establishment process.

Established Businesses can benefit significantly from Business Loans. When acquiring Business related Loans for the very first time, banks and various lending institutions will require specific personal requirements from the individual borrowers. These could include his/her business plan, educational background, personal history, and his/her future business propositions.

Individuals setting up their own business in the UK may also need to furnish financial proof that their business has been rendering profits within the past few years. In this way, lenders will become enticed to offer Business Loans to their borrowers, knowing that their borrowers’ business has the financial ability to repay the loan amount shortly.

The repayment of Business Loans depends upon the nature of the business acquiring the loan. If the borrower of the loan happens to be a sole trader, then he/she has to bear the entire responsibility for the full repayment of the loan. If the company is on a partnership basis, then all the employees or partners are jointly responsible for the repayment of the loan.

Business Loans are available in two categories; Secured and Unsecured. Depending on the financial needs of the borrower, and whether he/she has any pending utility bills or piling debts, the loan can accordingly be tailored to suit his/her needs. Secured loans are the most preferred form of Business Loans in the UK. Homeowners can acquire these loans with borrowed amounts of up to the £100,000 mark. This is irrespective of whether their credit history is favourable or not.

Business loans – 7 reasons not to use a bank

So you’re a small business owner, and you need a business loan to further the objectives of your company. Where do you turn? 

When it comes to a business loan or commercial real estate loan, there are many good reasons not to turn to a traditional bank. Here are some of the most important reasons. Many small business owners will find most of these points directly applicable to them. 

“The bank turned me down.”

Of course, the biggest reason most small businesses go looking for alternative sources of commercial real estate loans is that the banks have declined them. Small businesses are often forced to look for other sources of funding because the banks will not provide it. This is not even listed below, since there are many positive reasons to prefer non-bank funding, even if you can get an approval from a bank. 

REASON 1 – The minimum loan amount available from banks is too high 

In many cases, banks will not offer a commercial real estate loan for less than $250,000. So if you only need $100,000, you will be pushed to borrow more than you need. Or if your property will not support a $250,000 loan, you are out of luck with the banks. 

The solution is to look for an alternative funding source that can provide a lower minimum amount. Some commercial financing services will go as low as $100,000, and will often give you better terms and much better service than the traditional banks. 

REASON 2 – Many traditional banks will charge you an up-front “commitment fee” to examine and process your application

Banks usually think they are doing you a favour by processing your application, so they will often make YOU pay for their attempts to win your business. 

The solution is to find other established and credible lenders who are eager to offer you better service without charging you a fee for processing your application. 

REASON 3 – Most traditional banks will severely limit the amount of cash you can get from a commercial real estate loan

Banks usually have very narrow rules about where you can use the cash derived from a commercial real estate loan. If you need a cash injection for your business or want to use the proceeds from a commercial mortgage as a down payment for another property, most banks will not be interested in that type of loan. 

Look for a lender who does not restrict your use of the cash derived from commercial real estate loans. Some services, (see links below) can provide commercial loans that give you up to $1 million in cash to use however you want. 

REASON 4 – Most traditional banks require detailed business plans before approving a commercial real estate loan

Many small businesses have business plans, but they are usually not sufficiently detailed to satisfy the banks. As a result, applying for a commercial real estate loan from a bank can turn into a very time consuming and expensive process. Creating the type of business plan that is adequate for the banks will usually cost thousands of dollars. 

Find a lender who does not require business plans as part of their underwriting process for a commercial loan. 

REASON 5 – Many traditional banks require tax returns for a commercial real estate loan

If you are either unable or unwilling to provide tax returns for your business, many banks will not give you a commercial real estate loan. Even some of those banks that do not request tax returns will ask borrowers to sign IRS Form 4506, which authorizes the lender to obtain tax returns directly from the IRS. 

When looking for alternative sources of funding, make sure they do not require either of these conditions (tax returns or access to your IRS records). 

REASON 6 – Most banks will require cross-collateralization of personal property

Even though there is sufficient collateral in your business property to secure a commercial real estate loan, many banks will require you to provide additional security by putting up personal assets. Business people have become so used to banks doing this that they assume it is a necessity. 

But the truth is, over-collateralization like this can restrict your freedom to dispose of your assets as you see fit. And fortunately, some non-traditional lenders do not require cross-collateralization at all. 

REASON 7 – Most banks require income verification

Many small business people and self-employed borrowers have incomes that are erratic and difficult to document. There are many legitimate reasons for this, but traditional banks generally do not care. Very few of them will provide commercial real estate loans without complete income verification. 

An alternative used by some non-traditional lending sources is to use the “Stated Income” approach. Look for a lender who operates the Stated Income approach and does not require income verification.

Business loan – An effective tool for growth

Every business requires financing at some point in time to expand and grow. A business loan can be availed easily provided the loan seeker is aware of its various aspects. This helps in better planning of the loan.

Before beginning, a hunt for a business loan one should know the exact reason for borrowing. It is a new business you want to set up; you aspire to buy a business or planning to expand the established one, reasons are many for asking for a business loan. So, first, you should decide on your requirements and the main aim of taking a loan. It will be of great benefit if the borrower keeps his business size in mind as it helps in arriving at a better decision regarding the loan.

If you own a small business, then it would be wise to take a loan against your property. Your home or business can serve the purpose of security as collateral. With the lender having the security, he can safely offer a more considerable amount to the borrower. Secured business loans are offered anywhere between £5000 to £100000 and are reasonably comfortable.

In the case of a secured business loan, the lender on getting adequate security readily agrees to whatever duration of repayment the borrower is at comfort. Such business loans can be availed for a period of anywhere between 3 to 25 years. On having longer repayment duration at hand, businesspersons, especially of smaller volume, do not feel the burden. Interest rate, however, depends also on the size of the business one holds. The higher business volume will be of big help in bargaining for a lowered interest rate. The credit record of the borrower also contributes towards achieving the desired interest rate.

There is an added advantage of secured business loans that it enables business in paying all previous debts, which may be of the higher interest rate. Thus, it can reduce the outgo and businessperson is no longer worried about those many loans and repayments and can concentrate on new plans.

At times businesspersons face a sudden shortage of much-needed finance. Short term unsecured business loans are available. However, the lender will charge a high-interest rate due to the absence of security as collateral. In case a loan is required for high investment in some projects, then he can opt for long-term repayments.

There is another effective way of getting a loan if the businessperson is unable to offer suitable collateral, which becomes a problem. No collateral is needed in unsecured cash advance because it is given based on current business volume, credit history, and repayment potential of the borrower. These unsecured business loans, due to the absence of collateral, are given usually at the higher interest rate and are mostly for an urgent need.

A lot depends on the loan seeker’s credit score with a higher score helping in quick processing of the loan. If the borrower’s credit score is on a higher side, he may extract a favourable lower interest rate and a more massive amount. You can have your credit score evaluated from any credit rating agency. A score of 620 is considered good enough to assure the lender of the credentials of the borrower.

We can say that if availed wisely, business loans go a long way in helping the growth of the business. Once you put property such as home or business as security before the lender, you are in a position of bargaining for a lower interest rate. Also, the borrower can have a more significant amount that is needed for expanding business or setting up a new one. Business loans can be availed for immediate requirements if urgency comes.

Bad credit business loans − All you need to know

Being in business can be very lucrative, even for people with bad credit history. In this article, find out how bad credit business loans can help all the potential borrowers.

Business is a sector in which most people like to put their hands in. The reason is simple and easy to understand. There is no other field that pays as much as this field would do if you get it right in terms of all the factors, i.e. in terms of input and other related factors.

People with bad credit history too are eligible for business loans. By bad credit history, we mean people or borrowers who failed to meet the repayment plan set out by the creditors at that point of time. This resulted in getting a low credit rating.

People with bad credit history usually find themselves being let down when we talk of loans and other financial help. However, that can now change with the arrival of bad credit business loans. Bad credit business loans are loans that are offered to people with bad credit history to start a small scale or a large-scale business.

Bad Credit Business Loans provide and aim to fulfil all that a person wants from any loan. With all the features it can provide, bad credit business loans will surely be a hit with the borrowing public.

The main selling points of any loan are the benefits that they provide. Some of the benefits of the bad credit secured loans are that the loans are available at low-interest rates, which will suit all the potential borrowers. Along with that, the range of the loan is quite extensive, which always helps. Again the loan repayment scheme can be chosen, which will be appropriate. Also, the loan can be used for any business activity, which provides a broader platform for the use of the loan that facilitates better utilization of the loan.

Another notable advantage of the loan is that the borrowers can improve on their credit score by paying attention to the guidelines that are laid out by the creditor of the bad credit business loan. This will allow the borrower to get the loan at regular terms next time around, which will be a lot more borrower-friendly.

Applying for loans is an easy process, which starts with the person who wants to borrow the loan by going to a lender and applying for a loan. This can be done either online or through a local lender. Once the application is submitted, the loan decision is made in a few working days.

Commercial business financing in the UK

Commercial business financing loans are providing an unmatched offer for all UK business people. These loans are available both in secured and unsecured form. In this article, commercial business financing in the UK and its various aspects have been discussed.

Good news for all the UK borrowers. Now commercial business financing for them has become so easier. Why? Obviously, for commercial business financing loans that are specially tailored only for UK borrowers. If you are a UK borrower, thinking about financing in your business then grab the chance, avail commercial business financing loans.

Commercial business financing loans are mainly used for business or commercial purposes in the UK. Whether it is related to buy any new business premise, commercial building or any business assets, commercial business financing loan is the apt one that assists all the UK borrowers to meet their needs.

A UK borrower can execute commercial business financing either in secured or in an unsecured way. For financing in a secured way, obviously, security is required. Any worthwhile collateral can be used as security, like a home or other real estate, automobile etc. Oppositely, if any UK borrower wants to finance in his business in an unsecured way, then he does not need to pledge any security against the loan amount. However, generally for financing, a borrower can borrow anything between ₤ 5000 to ₤100000 where the repayment period varies from 3 to 25 years.

In the UK, commercial business financing loans are available both with fixed and variable rate option. In the case of fixed-rate, borrowers need to pay the same amount every month. While in case of a variable rate, the interest rate changes according to the changes in the loan market.

Nevertheless, some documentation is required while submitting the loan application. These are as follows:

A UK borrower has to attach a loan request while applying for a commercial business financing loan. In this request, the borrower should mention what type of loan he wants to borrow, how much he needs for funding in his business etc.

Mentioning the business plan is vital if the applicant heads for a new venture. At the same time, it is also necessary to reveal the guess estimation regarding yearly turnover. Do remember that all information should be concise and proper.

If the purpose of commercial business financing is related to business expansion, then the borrower has to comprise a brief of his business profile and all financial statement including tax returns, balance sheet, profit and loss statement etc.

Generally, the decision of commercial business financing takes 1-4 days. By that time, a borrower may be asked to provide some more information. In such cases, a borrower can take help of a loan broker. There are numerous brokers in the UK, who help borrowers to submit their loan application to various lenders for approval. And needless to say, all borrowers should try to make some effort to find out a good deal.

Commercial business financing loans are giving all the UK borrowers a rewarding opportunity for financing in their own business. Such kind of loans can be used for all sorts of business- new or existing. With lots of facilities, these loans are truly a benediction for the UK business people.