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Most businesses at some point will need to borrow some extra money. This might be to provide a bit of extra working capital to help out with cash flow, or it might be to fund plans to grow and develop, and invest in new products, equipment and premises.

If you would like to find small business loans, UK banks and lenders will be happy to talk to you and tell you about the financial products and services that they have available.

How to start a business loan

Before you start talking to specific banks and lenders, it is worth having a clear idea of what you want the extra money for and what benefits your business is looking for. This will help you determine which is the best finance products for your businesses needs.

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 assets to use as security.

The benefits of loans

When businesses look for loans, the benefits they usually look for are:

  • Flexibility in the amount they can borrow
  • A good deal on charges and a low interest rate
  • A minimal amount of security needed
  • A quick and straight forward application process

Alternative options

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

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

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