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Business loans help many businesses start-up and expand. Business loans are available as both secured and unsecured options.

There are a variety of loan options available under the banner ‘new business loans’. The reasons for a new business loan is primarily to assist entrepreneurs to start their new ventures, for those borrowers who are suffering from a bad credit problems, and for borrowers that have no assets to offer as security.

The benefits of new business loans

The benefits of new business loans are:

  • You don’t need to prove your credit history
  • The loan can fund your full set up costs, including: solicitors fees, plant and machinery and set up expenses
  • You don’t need to put down any security

New business loans are also a great option for bad credit borrowers, as no matter how poor your credit score is, you will be able to get a loan, new business loans are also perfect for businesses that require a loan but don’t want to or have no assets to offer as security.

How they work

There are many banks and lenders who will offer new business loans and it is advisable to get advice from an independent commercial finance professional in order to understand whether a new business loan is really right for you. If it is the advisor will be able to match your requirements with a lender.

Whilst the new business cannot guarantee a profit or a certain revenue, and doesn’t have a credit history this does not prevent the newly set up business from being considered unreliable for the purposes of being offered a loan.

However you should be aware that as with all types of borrowing and lending, there are fees and lenders will want to cover their risk and get their money back in the future.

The alternatives to new business loans

You may have your reasons for wanting a new business loan, but you should ensure that you choose the right finance product for your business not only now but as your business grows. You do not want to commit to a product that restricts your business in the future.

You should consider all of your finance options, some of these options include:

  • Asset based finance
  • Asset lending
  • An agreed business overdraft
  • Invoice Finance- Factoring and Discounting

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