Because of the wide variety of loan options available, it is often not clear which is the right option for your business. This can make starting a business loan, daunting and confusing.
The different loan options for businesses include:
- An agreed business overdraft
- A fixed rate loan- where the interest rate stays the same over the loan period
- A variable loan- where the rate of interest changes with the base rate
- A capped loan- where the interest rate stays the same for a set period
- Asset finance
- A commercial mortgage
- Invoice Finance- Discounting or Factoring
How to start a business loan
When you are considering starting a business loan, you will need to know the answers to the following questions:
- How much money do you need?
- How flexible do you want the repayment terms to be?
- Would you like a fixed, variable or capped interest rate?
- Would you be willing to or are you able to have the loan secured on property?
- What will you do if the business cannot repay the loan?
You will need to answer these questions in order to determine which type of loan to consider, and the possible lenders will also require most of this information too. Not all loan options may be suitable for you business, for example certain options will not be suitable if you don’t have property to use as security.
Flexible finance options
Flexibility and control over finance is very important for businesses, there is nothing worse than getting tied into a finance option that is costly and not suitable for your businesses long term growth.
Whilst bank loans seems like the obvious solution to finance needs, there are other finance solutions that are flexible and do not need to be secured, like Invoice Discounting for example.
Invoice discounting is similar to factoring, in the way that it releases cash tied up in unpaid invoices, often within 24 hours of raising the invoice. However Invoice Discounting requires you to collect the payments yourself.
Invoice discounting improves cash flow and gives you the ability to get greater amounts of finance as the more you invoice the more you can borrow.
For further information regarding business loans please contact our advice team on 0800 597 4757 or apply online using the form opposite.
- Business Loans – home
- Exploring and understanding your options
- Understanding and arranging a business loan
- Ways to find business loans
- Guide to arranging a small business loan
- Starting a business loan
- Short term business loan
- Long term business loan
- Business loans UK – finding finance that delivers
- Sourcing the right commercial business loan
- Secured business loans
- Fixed rate business loan
- Business Finance Loans
- Medium term business loans
- Getting a new business startup loan
- Do you need a business startup loan?
- An alternative to small business loans
- Finding small business loans UK
- Flexible business loan boost your working capital
- Long term business loans
- Business variable rate loan
- Business fixed rate loan
- Business loan UK
- Business IT Loans
- Business development loans
- Do you need a medium term business loan?
- Reason for a new business loan
- Bad credit business loans
- Variable rate business loan
- Business secured loans
- Short term business loans