Personal Loans to take care of your Business related needs.
Are you a business owner? Are you trying to get your start-up business off the ground? If your answer is a “Yes”, you must spend a minute reading the following.
You could get a business loan for as little as £500 to as high as £150,000 or more. It could be from the government or private loan providers. The choice is yours!
What is a Business Loan?
It is a loan for business purposes. The type of business loan you take out will depend on your circumstances.
It could be a start-up loan, a short-term loan or a long-term one.
Many businesses often feel the necessity of a cash boost. Your business could need some extra cash to run the existing operations better. The company could also need some money to fund your expansion plans. Or to cover your working capital due to unexpected bills.
Also, if you have a business start-up that you are trying to get off the ground, you might need some extra funds. It could be for short-term or long-term basis.
Trying to get small business loans from traditional or high street banks could be a tricky task. Their strict lending criteria may not be too helpful. That’s why many customers look for alternative sources to get unsecured loans.
While looking for small loans, one faces an obvious question. Secured or an unsecured loan, which one is better for me?
Let’s try and answer this question!
Secured loans are often large-amount loans. They get secured against any machinery, property, etc.
Unsecured small business loans are not secured against any valuable. But, a guarantor could be necessary. In most cases, the lenders ask for a director’s guarantee.
Your decision to go for a secured or an unsecured loan will depend on the amount you are trying to borrow.
What are the essential aspects that you should keep in mind?
1. Interest rates. It could be a fixed or a variable interest rate. Most small business loans come with fixed interest rates.
2. Duration. The choice between going for a short-term or a long-term loan could depend on two factors. The reason you want the credit for and how fast you can pay it off.
3. Loan Providers. You could have three choices. A government-backed loan, high-street-traditional banks or private loan providers.
Most loan providers will have some basic criteria. You should be at least 18 years old, a UK resident and not a part of any debt management plan.
Government-backed start-up loans could offer as little as £500 and up to £25,000. The repayment period could be up to 5 years. You get a fixed interest rate of approximately 6% per year.
One gets more flexibility from private loan providers. It could mean quick, online applications with fewer formalities. They could offer loans for a period of up to 10 years or more. They could also provide for a short duration of 6 months. The amount could vary depending on your need.
Want to find out which one out of various small business loans will suit your business? Talk to your financial adviser now.
What is an IVA?