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Business Loans

Whether you’re a small UK venture or a large international company, getting access to the right type of finance can be crucial if you want to grow, invest and create jobs.

Covid-19 – Emergency Funding

It’s safe to say none of us could have predicted anything as bad as the Covid-19 (coronavirus) pandemic and the devastating impact it’s had on businesses large and small throughout the UK, and indeed the world. The speed of which the virus spread gave the majority of businesses little time to formulate and implement a contingency plan before the Government ordered their closure, sadly meaning a large number will fail to open up again once things return to normal.

What Is A Business Loan?

A business loan is no different from any other type of business finance. The credit provider gives you money upfront, and then you repay it, including any interest and fees over an agreed timeframe.

What Are The Rates and Fees?

The rates and fees could vary significantly based on the lender and type of funding product they offer. The rates can also be affected by your business activity, such as performance, industry sector and credit history.

How We Can Help

To help you make an informed decision, fill out your details on the form below for a free no obligation consultation with one of our senior advisers who will set you on the right path to making best choice for your business

Thankfully there are several lifelines available to businesses in the form of grants and business loans, whose aim is to aim help businesses stay afloat during these unprecedented times, as well trying to keep the economy ticking over, albeit slowly.

These include;

  • Coronavirus Business Interruption Loan Scheme (CBILS)
  • Small Business Grant Fund (SBGF)
  • Bounce Back Loan Scheme (BBLS)
  • Retail, Hospitality and Leisure Grant
  • Fisheries Response Fund
  • Domestic Seafood Supply Scheme
  • Zoos Support Fund
  • Dairy Hardship Fund

The Local Authority Discretionary Grants Fund is also available to support small and micro businesses that are not eligible for other grant schemes.

Also, if you’re self-employed or a member of a partnership and have been adversely affected by Covid-19 you can claim a grant through the Self-Employment Income Support Scheme

jar of pennies

Business Loans

Even without the advent of a global pandemic, unless you’re extremely financially savvy, most businesses will have thought about taking out a business loan at some point, be that to help with a start-up idea or for almost any business purpose, such as boosting cash flow, purchasing equipment, recruiting staff and covering unexpected bills.
A business loan is no different from any other type of business finance. The credit provider gives you money upfront, and then you repay it, including any interest and fees over an agreed timeframe.

Loans can be both ‘secured’ or ‘unsecured’ and, whereas unsecured loans are typically smaller amounts at a higher cost with shorter repayment term, offering an asset as security against the loan may enable you to secure more funds at better rates, especially if you’re looking to borrow a larger amount.

What Are The Rates and Fees?

The rates and fees could vary significantly based on the lender and type of funding product they offer. The rates can also be affected by your business activity, such as performance, industry sector and credit history. The term you wish to take the loan out over will also have an impact on the amount you will need to pay back.

Medium to long-term business loans allow you to borrow funds to help you build your business. Medium-term loans can be repaid in monthly instalments over one to five years, while long-term loans can range anywhere between five years up to 30 years in some cases.
With a long-term loan, the monthly instalments tend to be smaller and more manageable than with a short-term loan, as you have longer to pay it back. You may also be charged a lower business loan interest rate compared to a short-term loan.

Things To Consider

Although your repayments can be lower with a long-term loan, keep in mind that you’ll usually end up paying more in interest overall.

A long-term loan could also restrict the monthly cash flow of your business, as you could be repaying the amount borrowed over several years.

And, if you take out a secured loan that is linked to high-value assets such as property or stock, there’s also a risk you could lose these assets, if you’re unable to keep up with the repayments.

The Application Process

As well as the application form, most lenders will require you to provide supporting documentation to improve your chances of being accepted for finance. Again this will vary between lenders but will typically include;

 

  • Your company tax returns for the past year
  • Up to date business income statements and balance sheet
  • Details of any asset you may be using as security, including titles of ownership
  • Your articles of company incorporation
  • Any business licenses and commercial leases
  • Your business plan
  • Personal bank information and statement of income
  • Personal credit score
  • Personal Identification i.e. drivers licence

Eligibility Criteria

As with most borrowing, when it comes to business loans there is certain criteria that a lender will need you to meet before they will review your loan application. This criterion can vary between lenders but will typically include;

  • Proof that all directors, owners (shareholders) or partners of your UK-registered business are UK residents aged 18 or over
    ou have a good credit history and haven’t been declared bankrupt or had an Individual
  • Voluntary Arrangement in the last 6 years (either the company, directors, owners or partners)
  • You are either a sole trader or your business is a partnership, limited liability partnership or a private limited company
  • You haven’t been a disqualified director or a director of a failed business within the last 6 years
  • You’re able to repay your fixed loan repayments by Direct Debit
  • All credit is subject to status and credit checks.

How We Can Help

The number of different lenders and loan types out there can make choosing the right one for your business a bit a headache.

Whether you’re a small UK venture or a large international company, getting access to the right type of finance can be crucial if you want to grow, invest and create jobs.
To help you make an informed decision, fill out your details on the form below for a free no obligation consultation with one of our senior advisers who will set you on the right path to making best choice for your business

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