A business loan is a very flexible way to fund a range of projects. We can help you find and compare the leading lenders easily.
Business Loans
A business loan is credit, usually in the form of cash, that you borrow and repay over an agreed length of time and can be unsecured or secured against an asset. Banks, Challenger Banks and alternative funding sources, such as community development finance institutions, peer to peer lenders, crowdfunding platforms and even can provide businesses with loans.
In addition to repaying the amount you are borrowing, you will need to pay interest subject to the following considerations:
- the length of the loan
- the total amount you borrow
- whether the loan is ‘secured’ – e.g. if you own your home and agree to transfer ownership to the loan provider if you don’t keep up your payments
The interest rate can either be fixed for the duration of the loan or can be variable, meaning it will change subject to other factors, for example the Bank of England base rate.
Advantages of Business Loans
If a secured loan, lenders take on less risk than they would with an unsecured loan, increasing your chances of being approved if you’ve been declined for an unsecured loan. Security also means lenders are more likely to lend larger amounts, over longer time periods, and at lower interest rates
Funding
From £100k to £2.5m
Repayment Terms
1 to 60 months
Typical rates?
From 0.89% per month
All interest rates quoted are indicative only as rates will only be confirmed based on the risk profile for each deal. Risk category associated with the deal. This is based on primarily debt survivability and security available for the loan
Advantages of Business Loans
Unlike overdrafts, loans are not repayable on demand – this means you can plan ahead more reliably for the whole term (often between 1 and 5 years)
Loans can be tied in with the lifetime of the equipment or other assets you are looking to purchase with the amount you are borrowing
You won’t have to give the lender a percentage of your profits or a share in your company
Things to be aware of…
Loans are usually not very flexible – e.g. you may have to pay additional charges if you repay early
You might struggle to meet monthly payments if your customers don’t pay you
If your loan is secured against your personal property or assets (e.g. your home) you could lose them if you don’t keep up the payments
The cost of repayments for variable rate loans can change, making it harder to plan your finances
