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Business Loans Explained

Most businesses need a financial boost at some point in their life and often find that business loans help elevate cashflow issues and turn a new idea into a reality

If you’re considering a business loan and find yourself confused about all the different types and terms, we’re here to help. With such a wide variety of loans available to suit different business needs, it’s key to choose the right product for your loan purpose and business requirements.

Most businesses need a financial boost at some point in their life and often find that business loans help to elevate cashflow issues or turn a new idea into a reality. Whether you’re a start-up business looking to get off the ground or an established one looking at expanding, business loans allow the opportunity to develop and grow.

Your circumstances will determine which type of finance is best for your business. There are many different lenders in the market, many offer specialised loan products to fit your business requirements.

To find the most suitable loan type for your business needs, lenders will take into consideration a number of factors including:

  • How long your business has been trading
  • Annual turnover
  • Whether you have filed accounts
  • What you require the funds for
  • How long you need to repay

The amount that you need to borrow will make a difference between which lenders will offer you finance, as will your business credit score.

A business loan is similar to a personal loan; however, they are specifically for business use only. Some business loan providers offer access to short term loans, typically for less than a year. Others can be arranged over a longer period of time, which will allow you to borrow larger sums of money.


Why Compare Business Loans?

A question you may ask yourself. When you compare business loans online you can rest assure that we’ll help find the best finance solution for your business. There is no one size fits all business loan, your business is unique. We can help by comparing loan providers and delivering results based on a few key questions about your company and its circumstances.

A growing number of lenders are offering finance for businesses in today’s market. We compare loan providers from high street banks, challenger banks, online lenders to alternative finance houses.

Compare lenders interest rates & fees in one place instead of hours of time shopping around. With eligibility and criteria being different between lenders, comparing business loans is designed to make your search for a lender quick and hassle free.

Our aim is to make the process of you finding finance simple, our business loan comparison service allows you to focus on your business.


Only the Best Business Loans from our Lenders

You can be certain that by using our comparison service, we will help you find the best business loans from a carefully selected panel of lenders.

Finding the best business loans can be challenging and a bit of a mine field. We understand both business needs and lender requirements. This allows us to ensure the results we deliver are a suitable match.

We compare the best business loans across the market, which includes lenders from high street banks, challenger banks, independent lenders to small specialist lenders.


Business Finance Options

With business loans, you have the ability to spread the cost of investment, breaking these down into more manageable payments

We have access to numerous finance options, from unsecured loans, short term finance, merchant cash advances, invoice finance to asset finance and more. Our loan finder will compare business loans across the market.

Our business finance options open up the ability to borrow funds from £1,000 up to £20,000,000. Funding options are available for new businesses and small to medium sized companies. We can also help if you’re a large business too!

Flexible repayment terms and options are available. Depending on the type of finance you choose to go forward with, you have a great deal of choice over how long you choose to take your finance agreement for.

All of our loans have different repayment options, which means you can choose the route that is best for your business.

With business loans, you have the ability to spread the cost of investment, breaking these down into more manageable payments.


Business Loan Interest Rates & Fees

Interest rates and fees will vary depending upon the lender and a number of other factors. Including the amount you borrow, how long you wish to repay and ultimately your business credit rating.

What will the lender take into account when calculating business loan interest rates?

  • Business credit rating
  • Loan amount
  • Repayment term
  • Business age
  • Profitability

Each lender will have its own interest rates and fees associated to different loan products and risk factors. Generally, the higher risk the lender deems your business to be, the higher the cost of finance.

Your business credit rating is a key factor taken into consideration when the lender assesses the risk of lending to you. If your business credit rating is poor, the lender may see you as higher risk and will therefore pass on some of that risk to you. This is usually in the form of agreeing a higher interest rate or in some circumstances they may request a personal guarantee.

It’s important to understand additional costs associated with a business loan, such as arrangement fees, early termination and penalty fees for late or missed payments. By comparing business loans with us, we can help to find you the best loans based on your circumstances.


Eligibility and Criteria for Business Loans

There are no set standard eligibility criteria across lenders, as there are so many business finance options available. Ensure you have the following information to hand:

  • Annual business turnover and profit
  • Filed accounts with Companies House
  • Business bank statements
  • Trading history
  • Credit rating issue, such as late payments and CCJs
  • Loan amount vs turnover
  • Purpose of loan
  • Personal details

You want to be able to help the lender build up a picture of your business. They need to understand the purpose of the loan and your ability to repay in order to provide you with the best loan.


Loan Securities & Guarantees

There are two loan categories when looking at business loans; unsecured and secured.

A secured business loan will require you to use assets as security against the amount you borrow. Potential assets the lender may use include commercial property, vehicles, stock, plant and machinery.

Whilst an unsecured loan does not require security against assess, a registered business director may be required to sign a personal guarantee. It’s important that you understand the implications of agreeing to a personal guarantee.

Deciding whether you require a secured loan vs an unsecured loan, will be dependent upon whether you have assets that can be used as security or not. If you’re not sure which loan is right for you, don’t worry, you’ll be able to discuss your finance options in further detail.


Business Loan Finder

Compare and find business loans online with our easy to use loan finder service. Tell us a bit about your business and what you need, and we’ll work out the best business loans for your requirements.

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