There are many business loan products available to choose from, if you decide that your business needs additional working capital. The advantages over an overdraft is that less interest may be paid over a specified period and at a set interest rate. This can help spread the costs of business finance when a company is struggling to pay creditors or looking to meet its growth targets.
Taking on finance to grow your business is not something that should be taken lightly. A business loan should be used in a way that will be beneficial to your business in both the short and long term.
How much do you need to borrow and why?
These are key questions you need to ask yourself before arranging a business loan. Is the loan required to generate additional working capital or for property development, new machinery or equipment? Have you prepared a business plan matched to your loan requirements?
What kind of business loan?
There are a variety of different types of loans. Interest can be capped, fixed or variable and the actual rate of interest may vary significantly between lenders. Loan terms can vary from 1 to 10 years, usually providing that the loan term doesn’t exceed the life of the asset and there are options available such as repayment holidays.
The research and preparation undertaken prior to making any loan application will enhance the prospect of the loan being granted.