Borrow up to £995
Rates from 278% to 1576%
3-12 month repayment
From £1,000 to £25,000
Rates from 4.7% to 278%
3-36 month repayment
Representative Example: Borrow £700 and pay £111.27 per month for 12 months at an interest rate of 140% per annum (fixed).
The total charge for credit is £635.24 The total amount repayable is £1335.24. Representative 277.5% APR (variable). Your APR rate will be based on your circumstances.
† Not all loan types and amounts are eligible for 20 minute payouts. Your chosen bank may increase the time you receive the funds.
Business Loans in the UK: What is the ideal option for you and your business?
There are numerous businesses owners all over the UK who are looking for outside funding to take their company to the next level. If you are one of them, the good news is the available options have never been in abundance, from banks, to mainstream financing institutions, to online lenders, and even government grants. The kind of business loan term however, may hold a significant impact on your business’s future health that’s why it’s vital that you opt with the one that is perfectly suited to your company’s needs and present circumstances.
Here is a quick breakthrough on the business loans and terms that you can access in the UK today.
Short-term business Loans If your business has plenty of revolving costs to cover or requires extra funds to survive a tough season, then short-term business loans with its short-payment periods of up to three years, can aid in normalizing the cash flow imbalance. The advantage and disadvantage of this kind of business loan include:
- Advantage – You will be covering lesser interest payments compared to longer payment terms which means that it would be cheaper overall.
- Disadvantage – Your monthly payments will be bigger than if you would spread it on a longer period of time.
However, if you are looking to borrow money to deal with day to day costs or need additional funding ASAP, then it might be a good idea to consider other alternatives to business loans such as:
- Personal Loans
- Secured Loans
- Guarantor Loans
- Joint Loans
Now if you are looking to secure a loan to purchase a new truck or vehicle for your business, then you might want to consider leasing as a viable option. There are plenty of firms in the UK that are willing and able to provide financing solutions to business owners with regards to their products like automobiles and equipments and you can easily find a great leasing deal that provides competitive rates.
Medium and long-term business loans
Medium or long-term business loans, those that have grace periods that can last as long as 5 years of even longer, are ideal if you want a type of financing that provides small monthly payments that won’t eat a significant portion of your business’s earnings. If it takes a long time for your business to mature and become profitable, then medium or long-term business loans should be the better options than short-term ones. These types of business loans are normally available in mainstream banks which would demand a list of requirements before they grant you the funding that you are looking for. They can also be accessed online from various lenders and they might be the ideal options since they tend to offer less stringent eligibility requirements and faster transactions.
Secured and Unsecured Business Loans
Aside from being short, medium, and long term, business loans also come in two main types: secured and unsecured business loans. The kind of option that you choose should be based on your business’s needs and present circumstances.
- Secured Business Loans – The type of business loans are attached to an asset that serve as collateral to the credit agreement like land, equipments, vehicle, and others. If your business doesn’t have any high value assets at its disposal, you also have the option to personally offer one of your own assets like your home or property. In exchange for such security however, lenders will allow you to access big borrowing amounts with longer repayment terms and lower interest rates. Bear in mind though, that you will risk losing the asset that you pledge as collateral if you are unable to repay the money that you borrowed.
- Unsecured Business Loans – If you are not comfortable in providing some form of collateral in your credit agreement, you can also opt with unsecured business loans. But because there is no security in place, the lender will only allow you to access lesser borrowing amounts with shorter payment terms and higher interest rates. Qualifying for an unsecured business loan is also harder and will require you to present a lot more financial information to establish your creditworthiness.
Business Loans Online
Obtaining the financing needed to develop your business may be a tough ordeal if you are unaware where to start. If you turn to banks and other high-street lenders, then you might be frustrated with their reluctance to grant business loans especially if you are a small business owner. This doesn’t mean that you are out of options however. As a matter of fact, there are plenty of lenders online that offer various business loans suitable for small business owners.
Why traditional business loans from banks are not ideal
Securing extra funding is important for every small or medium sized business in the UK. In the past, these businesses would rely on traditional business loans from banks to secure the extra capital that they need for various essential business reasons and purposes. Most of them however, end up being rejected due to insufficient eligibility. The truth is banks will always go for the bigger fish or those that will provide them with the biggest return for the least risk. With that being said, they would rather loan millions of pounds worth of business loans to a few big companies and corporations than lend it to hundreds of small businesses simply because:
- Big companies and corporations are more than likely to pay than small businesses
- They can make more money this way
Fortunately there are online lenders ready to step in The good news is there are plenty of lenders online that are ready to provide business loans to different business owners in the UK. The eligibility requirements are not at strict and extensive and they can even process a borrower’s application a whole lot faster than banks and high-street lenders. The interest rates can also be cheaper especially if you take your time and shop around online. With that being said, if you are looking for the ideal business loans, then going online might be your best bet.