trusted by our clients 4.9 stars
Business Loans
Business loans are a vital part of running a successful enterprise. Whether you need funds to start a new business or to expand an existing one, there are a variety of loan options available to help you achieve your goals. When it comes to finding the best business loans, there are several factors to consider: interest rates, repayment terms, and loan amounts are all important considerations, as well as the lender's reputation and customer service.
What is Business Loan?
Business loans are designed to provide funding quickly, often within a few days, to help businesses meet immediate financial needs. Quick business loans can be used for a variety of purposes, such as covering unexpected expenses, purchasing inventory, or funding marketing campaigns.
What Types of Business Loans Are Available?
1. Term Loans
These loans provide a lump sum of money upfront, which the business must repay over a specified term with fixed or variable interest rates.
2. Lines of Credit
A business line of credit allows a company to access funds up to a predetermined limit. It provides flexibility, as businesses can borrow and repay as needed, paying interest only on the amount borrowed.
3. SBA Loans
Small Business Administration (SBA) loans are government-backed loans designed to support small businesses. They offer favourable terms and lower interest rates but may have stricter eligibility criteria.
4. Equipment Loans
Specifically for purchasing business equipment, these loans help businesses acquire the necessary machinery or tools and use the equipment as collateral.
5. Merchant Cash Advances
This form of financing provides a lump sum in exchange for a percentage of the business's daily credit card sales. Repayments are made through a fixed rate of future credit card transactions.
6. Invoice Financing
Also known as accounts receivable financing, this type of loan allows businesses to borrow money against their outstanding invoices. Lenders provide an advance based on the value of unpaid invoices.
7. Microloans
These are small, short-term loans typically offered by non-profit organizations or government agencies to support small businesses and startups.
Pros of a Business Loan
Access to Capital
Business loans provide a source of capital that can be used for various purposes, such as expansion, equipment purchase, inventory management, working capital, or addressing unexpected expenses.
Business Growth
With additional funds, businesses can invest in growth opportunities, whether expanding operations, entering new markets, launching new products or services, or hiring other staff.
Flexible Repayment Terms
Many lenders offer flexibility in structuring repayment terms, allowing businesses to choose a schedule that aligns with their cash flow and financial capabilities.
Cons of a Business Loan
Interest Costs
One of the primary drawbacks of business loans is the interest cost. Borrowing money comes with interest payments, and depending on the interest rate and loan terms, these costs can add up significantly over time.
Debt Obligation
Taking on a business loan creates a legal obligation to repay the borrowed amount. Businesses must carefully assess their ability to meet regular repayment obligations, as defaulting on a loan can have serious consequences.
Risk of Collateral Loss
Secured loans often require collateral, such as property or equipment. If the business fails to repay the loan, the lender may seize the collateral, potentially losing valuable assets.
Interest Rate Key Determinants
Creditworthiness
Your personal and business credit history plays a significant role in determining the interest rate.
Business Financials
The financial stability and performance of your business, as reflected in financial statements, can influence the interest rate.
Loan Amount and Term
The amount you’re borrowing and the repayment term also impact the interest rate. Longer terms may result in higher rates.
What is the repayment term for a business loan?
Repayment terms for business loans vary widely and depend on the type of loan, the lender and the purpose of the financing. Common repayment terms range from a few months to several years. Short-term loans may have a repayment period of 3 to 18 months, while long-term loans can extend up to 25 years.
The choice between short-term and long-term loans depends on your business’s financial needs and ability to repay. Short-term loans may have higher monthly payments but allow for quicker repayment, while long-term loans offer lower monthly payments but accrue more interest over time.
Try Our Mortgage Calculator
Workout how much you could borrow and how much deposit you need for a mortgage.
How does the application process work?
Initial Enquiry
Tell us about your commercial finance requirements and specific needs. You can call us on 020 7036 6435. Alternatively, you can schedule a consultation or submit your enquiry online, and a member of our team will respond to you within 24 hours.
Documents
One of our qualified advisers will discuss your situation with you in more detail and advise of any additional information or documentation required to search the market thoroughly. Our advisors will research the market for potential rates.
Decision In Principle
Following their research, your adviser will present their recommendations tailored to your specific needs. This will include details of rates and any associated fees that may apply. Once ready to proceed, your adviser can request an agreement.
Application
When ready to proceed, your adviser will submit the full application. At this stage, the lender will review any documents you provided and get everything prepared for checking the property value and making decisions about the loan.
Offer
The formal finance offer will be issued once the lender is satisfied with the documentation provided and the business offers suitable security. Once approved, your advisor will discuss your needs and make any recommendations and arrangements.
Completion
When your solicitor has finalized the necessary legal matters, and all parties are ready, you can arrange your completion date. The solicitor will then make the arrangements required to request the funds. We'll ensure you get the best deal for your needs.
BOOK A CALL WITH A BUSINESS LOAN ADVISOR
Whether you’re looking for the best business loans, or quick business loans, or need support through the Recovery Loan Scheme, there are plenty of options available to help you achieve your goals. By carefully considering your financial needs and reviewing your loan options, you can find the financing that’s right for your business and take the next step toward success.
FAQ's
Interest rates on business loans are determined by various factors, and lenders use these factors to assess the risk associated with lending to your business.
The approval timeline for a business loan varies based on the lender, the complexity of your application and the type of loan you're seeking. In general, the process can take anywhere from a few days to a few weeks.
The amount you can borrow with a business loan varies based on several factors, including the lender, the nature of your business, your creditworthiness, and the purpose of the loan.
Repayment may be made in regular instalments over a set period, or the loan may have flexible repayment terms based on the business's cash flow.
If you're unable to repay a business loan according to the agreed-upon terms, it could negatively impact your credit score and financial standing. Depending on the loan agreement, the lender may take legal action to recover the debt.