Business Loans
Business loans are regularly used by business owners to access cash needed for starting up a new business, growth or improvement. There are a many programs and lenders available to use, so it’s important to understand your specific needs and find a loan that works for you.
What Is A Business Loan?
A business loan is financial help available to business owners of any sizes who need funding to help and grow their business. Start-up businesses and small businesses typically have a more difficult time than others securing a business loan, but it is certainly possible. Regardless of your business size, any lender you look to with will want to see firm documentation that supports the feasibility of the business as well as the intention for the loan.
What Can I Use It For?
Business loans are used for many things. Some common uses include capital investment, start up costs, refinancing of business debt and expansion of the business. Most business owners will apply for a business loan at some point because it is common to need extra funds at various stages of a business growing.
Where Can I Get A Business Loan?
Banks are a common lender of business loans but are often more conservative in their lending decisions. For this reason alone a bank is much more likely to get a loan underwritten to larger or more established business. It isn’t impossible to get a loan from a High Street bank if you’re small or just starting up but you will usually need to provide a lot of documentation and business plans.
There are many other sources of business loans in the UK, so have a look at lending sources. There are lenders and angel investors that specialise in small business or start up loans, as well as venture capitalists seeking an opportunity for investment. Additionally, there are several government programs designed to assist small or new business owners securing a business loan.
What Documentation Will I Need To Apply For A Business Loan?
Specific documentation will sometimes vary a bit depending on the lender but there are a few things that you will be asked to provide whoever you use:
• An up to date business plan which must include an overview of the market and potential customer base for your business
• Business and personal financial statements
• Collateral to secure the loan
• Incorporation or LLC documents (if applicable)
• Proof of ownership of the business or sale if the business was purchased by you
• Any Tax returns or credit references
• Material contracts (if applicable)
The basic items you will need are listed below but just remember that any lender will probably have their own list of information they will want you to provide.
Are There Different Types Of Business Loans?
There are many different types of business loans and sometimes the choice can be very confusing for some people. Some examples include specific programs for small businesses, industry specific loans, community development loans, “micro” loans for smaller amounts, and many other different options. Whatever it is that your business needs there is a relevant business loan for you and your Company somewhere out there.
How Do I Find The Right Business Loan?
Finding the right business loan for you takes a lot of time and effort. Research is the first thing so gather information about potential lenders and any programs that may be suited to your needs and then speak to a representative from these options to get more information. Outline your specific situation and ask about options that may be available to you. Persistence and perseverance will pay off in your pursuit of a business loan.
Obtaining a ‘business loan’ can seem a daunting task but it’s certainly manageable if you come across as organised and prepared. You need to demonstrate to the potential lender that you are a good candidate for the loan by providing thorough documentation about your business. And don’t give up if the first lender you ask turns you down, there are a lot of different lenders and lending programs available so just keep looking until you find the one that works for you.
• UK Trade and Investment – secure site
• UK Government Business Loan Information
