Business Finance Loans

Business Finance Loans

All new start-ups need money to get their business going, whether its to purchase stock and equipment, or to fit out premise or to develop and market products and services. They also need money to help bridge the gap between start up and development until customers start paying.

If you are in the start-up phase of a business, or your business is still young, you may be considering raising money through business finance loans. The great news is that there are plenty of business finance options available to you, the challenge is knowing where to start and which is the best option for you.

The types of business finance loans

There are plenty of business finance options available which include:

  • Agreed business overdraft facilities
  • Fixed, variable or capped business loans
  • Asset finance
  • Commercial mortgage
  • Invoice finance

Each option has its advantages and disadvantages, and each option is particularly suited to certain business situations, and operations. However unless you’re an expert in business finance it can be confusing working out which is the right product for you.

When looking into business finance loans it’s a good idea to approach an independent finance professional for some free advice. They will be able to work out which products are more suited for you and your business and they will be able to put you in touch with some prospective lenders.

Types of finance for start-ups

One of the difficulties in getting finance for a start-up is that lenders often want a guarantee that they will be repaid over time. However start-ups do not have a long trading history to show lenders, the absence of this trading history can make securing business loans a bit tricky.

Timing is also key for start-ups, so what start-ups need when securing finance is fast and flexible access to business finance loans. Start-ups do not want to be tied to long term commitments that could hold back growth in the long run.

This is what makes asset based lending a perfect finance option for young and start-up businesses. Invoice Finance such as factoring and discounting are excellent solutions, as they are flexible, need no security to set up, have low overheads and can bring in extra commercial benefits.

Factoring and discounting work by releasing the cash that is tied up in a businesses sales ledger. Instead of waiting 30-90 days for your customers to pay their invoices, the lender will pay up to 95% of the invoice often within 24 hours of the invoice being raised. Invoice finance therefore boosts your cash flow immediately.

For further information regarding business loans please contact our advice team on 0800 597 4757 or apply online using the form opposite.