Representative Example: On an assumed loan amount of £750 over 12 months. Rate of interest 191.2% (fixed). Total repayment amount £1726.68 and total interest is £976.68. 12 monthly payments of £143.89. My Financial Broker is a broker, not a lender*.
* As a broker, we are unable to ascertain exactly how many customers take out a loan or the lender’s rate of interest particular to that customer, therefore our calculation is based on the mean APR of our panel of lenders.
How Can Business Loans Help You?
Business loans can provide an important injection of cash for a business of any size, whether it is for maintaining cash flow, growing a business or starting a business in the first place. If you work with a broker service, you should be able to compare a huge variety of loan lenders, getting rates from the best business loan companies in the UK. A broker should also help you find the best terms to suit your company’s requirements.
More and more companies and entrepreneurs are moving away from traditional bank finance. The process of going to your local branch to discuss a loan with the bank manager can be time consuming and inconvenient, and today, there are a number of online business loan providers. These allow you to access finance at lower interest rates, find flexible repayment terms, and receive funds within a few days of approval.
To get an online quote, the application should take less than five minutes. Simply enter some basic details – including the amount you would like to borrow, how long for, your company name and turnover and you should be provided with a list of quotes, allowing you to compare business loans fast and effectively.
How Much Can I Borrow Through a Business Loan?
Here at My Financial Broker, we can help customers find loans from £100 to £2000 with the option to repay over a few months up to 2 years in monthly instalments. With a lot of broker services, you can typically borrow around 25% of your company’s annual revenue, although this may vary between lenders. To maximise your chances of approval, it helps if you have been trading for at least 24 months.
Types of Business Loans
There are numerous types of business loans – you therefore may need to do a little research before you apply. One of the benefits of applying with My Financial Broker is that we will compare the types of loan for you, and put you in touch with the best lender, depending on your needs. Below are some of the most common types of business loans:
- Commercial business loans
- Unsecured business loans
- Secured business loans
- Invoice finance
- Start-up loans
- Small business loans
- Revolving credit facilities
- Bad credit loans
Unsecured Business Loans
An unsecured business loan means that the loan is not secured against any form of collateral or valuable assets such as your office, stock, inventory or equipment. Most business loans fall under this category, and your eligibility for a loan is based on your company’s revenue figures, as well as the applicant’s business credit score.
The rates for this type of loan may be a little higher, since the lender has no collateral which they could potentially claim and sell if you are unable to keep up with your loan repayments. However, you do have the security of knowing that your assets are not at risk with an unsecured business loan.
Secured Business Loans
A secured business loan is when the loan is secured against something valuable such as your office premises, equipment, items or goods – the amount you can borrow is based on the value of this collateral.
It’s important to remember with a secured loan that if you cannot keep up with your loan repayments, you run the risk of the business lender repossessing these items or office space in order to recover the funds that they have lent out to you.
Business loans are not guarantor loans, so you do not require any other individuals to co-sign your loan agreement. Secured loans are useful for businesses that own a lot of valuable assets, and wish to maximise the amount they can borrow.
Business Loans To Help With Cash Flow?
Many small and large businesses in the UK are faced with ongoing cash flow issues. Such companies may have regular overheads such as rent, staff costs and equipment but experience a delay in receiving income through sales or outstanding invoices. This is particularly common for industries where products or services are ordered in advance and the businesses need cash upfront to pay for staff and stock. Examples include food products, fashion items, electronic goods, caterers and building jobs.
Brokers tend to work with a number of business loan companies that can help with cash flow, offering products such as invoice factoring and revolving credit facilities to help you stay on top of your finances at low rates of interest.
Why Should I Apply for a Business Loan?
There are a number of benefits to applying for a business loan. The most obvious is the low interest rates available, but we have also listed a few other significant advantages below.
When compared with other types of credit, a business loan can offer incredibly low interest rates. If you can demonstrate that your business is profitable, lenders are happy to offer low rates, as they can be assured that their investment is secure. As the loan itself is also secured against the value of the business or its assets, lenders additionally have collateral should the payments be missed.
Banks and financial institutions have become much stricter with who they lend to over the years. But specialist business loans from providers such as Iwoca and Funding Circle have much higher approval rates, and can cater for the self-employed and those with bad credit histories.
Help With Cash Flow
Some businesses rely heavily on invoices to be paid over 30, 60 or 90 day periods and struggle to maintain their cash flow each month. A business loan can provide a low cost injection of cash to help you stay on top of your finances and allow your business to run successfully.
Grow Your Business
For those businesses looking to start up or scale up, a business loan can be funded on your terms. You can choose how much you want to borrow and how long for, without giving up any equity or shares in your business. The rates charged for business loans are usually very low and far more competitive than getting funding through investors or venture capital.
Many business owners and entrepreneurs today are interested in alternatives to bank funding. This could include specialist finance companies, online lenders and challenger banks. The process is usually online, is often much quicker, and tends to have higher approval rates.
What Information Do You Need When Applying For A Business Loan?
In order to apply for a business loan with a broker service, you will generally need to meet the following criteria:
- Be a registered company
- Have a business based in the UK
- In most cases, you’ll need to have a business current account
- Be the owner or director of the company
- Minimum 24 months trading history and filed accounts (unless a start-up)
- Ideally you’ll need to have a profitable company
The loan application may only take a few minutes to be completed, as they tend to be streamlined and completely online. A business loan application will just ask for some basic information including proof of trading history, turnover and profit and filed accounts.
While not all brokers undertake a credit check, your business will typically have a credit score and this information may or may not be assessed by some of the lenders you’re connected with. If not, the director’s individual credit score will be taken into consideration.
Is the Company Director Needed for a Business Loan?
The company director is required to apply for the business loan (and some lenders may accept multiple directors). It is typically the director’s credit score that will be assessed during the application stage and this may be their individual credit score and/or their business credit score.
As a business director, if you’re concerned about applying for a new mortgage in the near future, you can be assured that having a business loan will not affect this in any way as they are seen as separate things. As long as your company is profitable, you can easily apply for a business loan to help improve or expand your business, without impacting your personal finances.
Why Apply for a Business Loan with a Broker?
One of the benefits of applying for any type of loan with a broker is that they can save you a lot of time when it comes to comparing lenders and checking your eligibility. A broker can do all the hard work for you, and try to put you in touch with a suitable lender that meets all your needs and requirements. Most applications shouldn’t take more than a few minutes to complete, and you should then get an instant loan decision on screen.
Another advantage of taking out a business loan through a broker service is that in most cases, only soft credit checks are undertaken when you apply. These are not reported on a person’s credit file, and therefore won’t impact their credit score. So if your company director is needed to make the application, they can rest assured that their credit rating won’t change. However you should bear in mind that if you are connected with a business loan provider, they may choose to perform hard credit checks, which can have an effect on credit scores.Apply Now