If you’re considering a business loan, there are a lot of things you need to bear in mind. With a wide range of loans on the market and various products designed for speed, short terms, growth projects, or small businesses, it’s hard to know where to start. There are also many different lenders on the market — you can get a business loan from high-street banks, challenger banks, online lenders, and small local specialists.
With so many products and providers, the eligibility criteria, interest rates, and overall costs can vary significantly. Let’s take a look at everything you need to know about business loans.
Some lending products are made for speed, so you get the money as soon as possible. How fast the loan is granted and and credited into your account can depend on how prepared you are. Most lenders will require detailed documents such as filed accounts or perhaps even forecasts, and the time at which you get these documents together can make the difference between a 2 days or 2 weeks.
Loans can be made for short-term business needs, with agreements between a few months and a couple of years. A Loan that is paid back over 2 years would be considered medium or long-term. If you're thinking about a loan for only a short period, then it might be worth considering a revolving credit facility (Business Overdraft).
There are some lenders that specifically cater for small businesses. Banks have always been reluctant to lend to Small businesses, but with the wide range of alternative finance available out there, there are far more options available.
It's not always impossible to get a business loan with a poor credit rating. Although, as you already know it's certainly more challenging to borrow money with that bad credit cloud hanging over your head. However, it's still worth exploring, and you might be surprised at the options available if you're willing to offer a personal guarantee or security.
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