These are challenging times for many UK businesses with the economy heavily affected by the pandemic, so much so that a business loan has become a need for businesses to survive.
The old saying that “cash is king” has probably never been truer to business owners than now, with many long established and previously successful enterprises failing, often due to a lack of liquidity. A ready supply of cash reserves is the “oxygen” of a business and when this is depleted, the pressures on it can often see a business fail. At the very least, a business owner faced with ongoing liquidity issues will find that running a business is extremely challenging and stressful under such circumstances.
Thankfully, there are usually options available to businesses who are looking for help with their cash flow situation and a business loan is the primary example. A business loan is simple to understand, can be quick to arrange, and can leave a business owner free from the worries of whether challenging periods of trading can be overcome.
Let’s examine the reasons why this type of loan is an option for your business to consider when taking your business forward.
A business loan is easy to understand
Many of us will have taken a loan or perhaps a mortgage in a personal capacity, and this works in the same way, albeit with the business borrowing the funds. A business loan sees an agreed sum of money advanced to the business which is repayable over an agreed period of time via regular repayments (typically monthly).
Is it difficult to secure?
When it comes to SME funding; there are many providers, ranging from high street banks through to online alternative finance providers. All lenders will usually charge interest at a level agreed prior to the loan being drawn plus an arrangement, or set up fee. The rates and fees charged for the loan usually depend upon the financial strength of the borrower and the credit history of the individuals making the application. Loan costs can be saved in many cases by repaying a loan early, providing an early repayment fee isn’t charged by the lender. This is because interest is usually charged on the time the money is actually borrowed rather than the stated maximum term of the loan.
Is a business loan flexible?
A business loan can be available to a business in many circumstances. For example, if a borrower has no security (such as a charge on a property) to provide to a lender, a loan can be provided unsecured. However, if you are able to provide some security, your loan may be more competitively priced as the lender is likely to see a secured loan as having a lower risk profile.
A business loan is flexible in other ways too, with funds being available over a range of repayment periods to suit your circumstances. The amount of money available also varies depending upon which lender you approach but it is possible to obtain a small business loan starting from modest amounts such as a few hundred pounds.
How fast can you secure a business loan?
Some potential borrowers can be put off making an application as there is a perception in certain quarters that the whole process is lengthy and complicated. However, the truth is often very different.
A business loan can move from the initial application stage to being funded in just 24-48 hours meaning the funds can be put to use very quickly. Accessing quick loans can often allow businesses to receive cash to capitalise on an opportunity, or, react to an unexpected cash shortfall.
Whilst a secured business loan can take longer to be drawn to allow for the additional legal formalities, lenders work hard to release funds as fast as possible.
When making an application, be prepared by having available the supporting information a lender is likely to need. Each lender will have their own specific requirements but most will require sight of documents such as recent accounts, bank statements and VAT returns. Supplying a lender with the necessary documents up front will mean your application for a business loan should be as speedy as possible.
Is a business loan right for me?
Whatever it is that your business needs, a business loan can help you to obtain it. It might be that you are just looking for an extra working capital “buffer” or that you need funding for a specific purpose. You may wish to increase your stock levels, purchase new equipment or undertake a marketing campaign and refresh your website.
Not all loans for businesses have a long repayment plan, a short-term loan may be ideal for your business, which means you pay off over a shorter repayment period, typically in under a year.
There are many types of loans, the key is finding the right one for your business, for example you may need a commercial loan or bridging loan if you operate in the property industry.
Funds obtained via a business loan can generally be used for any legitimate business purpose and can therefore help you to bring the plans you have for your business to life.
Discover how to obtain your loan with help from Newable Finance
With so many options on the market from so many providers, it can help to work with the funding expertise of Newable Finance.
We work with a wide variety of lenders to ensure that we can access the right loan for you. We never charge a fee unless we can provide you with an acceptable offer of funding so you can have complete peace of mind.
Why not speak with us today?
Contact our team today.