Why do businesses need loans?
Some finance needs are driven by opportunity and others by circumstances that require a rapid reaction. Examples include:
- Finance to develop a new product or service and take it to market
- Business loans to invest in new software, training systems or physical assets that support the company’s growth plan
- Finance that enables the launch of a comprehensive marketing and advertising campaign
- A business loan to cover the cost of a new e-commerce website
- A business loan to cover an unexpected tax bill
- Finance to cover the cost of hiring a specialist or new staff member for a specific project.
- Business loans to tide over the difficult period in a new business where the model is sound but cash flow will take some time.
- Finance to take a newer start-up through to a scale-up business, or to allow an SME to become a larger trading entity.
What types of business loan are available?
Unsecured Business Loans
Unsecured business loans are a type of business finance that doesn’t need any personal or business asset to be secured as collateral. You often need a good credit rating, a good financial history as well as a good and substantiated cash flow forecast.
Secured Business Loans
A secured business loan is a form of business finance where the loan is secured against a major asset, like a person’s property or a piece of equipment. Should you default on the loan, the loan provider takes ownership of the asset.
Cashflow loans are designed to help businesses struggling to pay bills or make essential purchases to keep trading. Cash flow loans provide some breathing space whilst businesses can get income that they’re due that has been paid late, or typically has a longer than ideal lead time.
Same Day Business Loans
Same day business loans are needed in extreme circumstances but can be achieved if you have the required paperwork ready. They’re often needed when a rare opportunity to purchase arises and funds are needed quickly in order to complete the transaction.
Short Term Business Loan
A short term business loan is where funds are needed only for a short time before being repaid. Often for cashflow or expansion purposes, the loan term is anywhere from 3 to 12 months.
Loans for smaller businesses
These are available to smaller businesses with a turnover of between £120k and £500k a year.
Loans for larger businesses
There are more suited for businesses which need to borrow at least £100k.
These larger loans are available to substantial businesses with a turnover of at least £1m annually.
Instant loans for businesses
These are available to business customers who need a same day decision on their application and the funds in their account on the same or next working day.
Cheap commercial loans
Where businesses have a strong management record and solid accounts which reflect excellent financial management and a sound foundation for the business, loans with low interest rates are available. This allows those businesses to invest in their future for the lowest possible finance cost.
Fast loans for businesses
All businesses have instances where they need rapid access to cash. Fast business loans are designed to provide instant cash flow. For example, an unexpected bill may have arisen or a new opportunity to service an account or meet a customer need. In these instances, businesses need to access cash quickly but may not have the reserves that they require to meet the whole cost.
Quick Business Loans
These are similar to Fast Business loan products, but typically used for smaller injections of immediate cashflow for all of those unforeseen situations that can occur when you run a business. This type of loan is particularly popular with our smaller businesses and those which are newer and getting to grips with their annual cost planning and projections. Often, a quick injection of cash can make all the difference in building a healthy and sustainable business for the longer term.
What are the benefits of a business loan?
There are various benefits to taking out a specialist business loan. For example:
- Business loan products allow the business to meet its objective – whether to prevent a cost-related issue or to invest in growth and opportunity for long-term success.
- Loan interest is often tax-deductible as a business expense
Business loans inject liquidity into the business – which is extremely useful during times of seasonal fluctuation or when the business is going through a period of change.
- Business loans do not give away portions of the business to an investor – as with investor finance. The business owners retain full control.
- Business loan products often have attractive interest rates and flexible repayment periods to help the business.
- Business finance products are provided by experienced lenders that can assess the client’s business and make recommendations on their financial needs according to their circumstances.
Whatever your business need, the right kind of flexible finance is available to you. We’ll carry out a needs assessment based on your requirements and circumstances and advise on the loan products we can offer you. Our team are experienced, helpful, friendly- and they don’t speak in jargon!
Get in touch for a no-obligation chat today and secure the business finance that you need.