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 alleviate 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:
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.
You can be certain that by using BusinessComparison, 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.
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?
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.
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:
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.
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.
Whether you're looking for a sole trader loan or you have a limited company, we can help you 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.