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Business Loans Guide

Bank Loan for Business

A guide to helping you understand and compare bank loans for business

Helping you to find the most competitive bank loan for business

When it comes to finding a competitive business loan, banks are known for their strict lending criteria. Whether you are an individual looking to start a new business, or an established business looking for funding, a bank loan for business is often the first-place people turn.

To apply successfully for a business loan, banks will require a good financial position and a sound business plan. Although, we also work with lenders which specialise in lending to businesses who do not fit the standard lending criteria.

To help you access a bank loan for business at the most competitive rates, we have produced this comprehensive guide.

How could a bank loan for business help?

For certain businesses banks can provide an affordable and flexible source of funds. Whether your business is struggling to raise capital for a large expense, or needs to improve short-term cash flow, a bank loan for business could provide the ideal solution.

A business bank loan is available for almost anything, although the most common reasons are to invest in new equipment, move to new premises, hire employees, purchase stock, or pay for professional services.

Without the necessary capital, opportunities to expand and grow your business could pass you by. A competitive bank loan for business could provide you with the funds you need to drive your business forward.

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What types of bank loans for business are available?

When searching for a flexible bank loan for business there are a variety of funding options available. In many ways a business loan is similar to a personal loan, with some providers specialising in short-term loans and others arranging loans for larger sums over a longer period.

Through our panel of lenders, a business bank loan starts from £1,000, with some lenders offering maximum loans of £20,000,000. The loan will be provided in the form of a cash lump sum, which is repaid over a set time period.

There are a variety of loan terms available, although each one will fall into one of two categories, unsecured or secured. An unsecured bank loan will allow your business to borrow funds, without needing to risk any assets as security.

In contrast, a secured business loan will enable you to borrow a set amount based on the value of assets, which the lender will sell if the loan falls into arrears.

Who is eligible for a bank loan for business?

Almost every business will require a financial boost at some point, with your specific circumstances determining which loan is the ideal fit for your business. Through our extensive panel of lenders, we can provide almost every business with a loan, although your options may be limited based on your business type or financial situation.

With a business bank loan, banks tend to lend to stable businesses which can prove their financial stability. This means if you are a start-up business, you may need to seek alternative business loans through peer to peer lenders or government funding pots.

During your application for a bank loan for business, lenders will consider a variety of factors including; how long you have been trading, the accounts you have filed, your annual turnover and what the loan will be used for.

Finding the most competitive business bank loan

When searching for a business bank loan, lenders provide a wide variety of products so never choose the first lender which springs to mind. Instead, take some time to carry out some research about the loans available, repayment terms and costs involved.

There is no one size fits all approach for your business loan, banks will instead tailor their products to suit your individual business requirements.

Our finance finder tool is designed to help you find a competitive bank loan for business, which meets your specific requirements. By finding out how much you need to borrow and how long for, our comparison tool will quickly search a range of banks to find you a list of matching loans.

We compare loans from a variety of banks, from traditional high street banks through to challenger banks.

Instead of spending hours searching for a competitive business bank loan and trying to understand their individual terms and conditions, we can compare the available loans to provide you with quick and hassle-free access to the funds you need.

Our lenders provide the most competitive bank loans available, which ensures we can provide you with the lowest interest rates and charges.

It is likely that the financial position of your business and its credit rating will impact the cost of your business loan. Businesses with an excellent credit rating and strong finances will have access to the lowest interest rates, as they are considered to be low risk in terms of defaulting on their repayments.

If you or your business has a poor credit rating, the bank may offer you a higher rate of interest, as this will enable them to recoup as much money as possible in a short period of time to reduce their risk.

It is important that you check the terms and conditions for any loan offer, as there could be additional costs associated with arranging or repaying the loan. These can vary between lenders, although many will charge fees for missing payments or repaying the loan early.

How can I improve my chance of being approved for a bank loan for business?

If you would like to take out a low interest bank loan for business, lenders will be unlikely to approve you unless you have a good business credit rating.

If you operate a limited company any accounts you file with Companies House will be included in your business credit rating, so it is important to keep these detailed and up to date.

Other ways to improve your credit rating include paying to have your accounts professionally audited, completing questionnaires from credit referencing agencies and keeping your own personal credit file in good order.

Although, banks will also consider factors such as the profitability of the business and your business plan when deciding whether to approve your loan request.

How long will it take to process a bank loan for business?

When processing a business loan, banks will need to analyse everything from the financial documents you provide, to the assets you are willing to offer as security.

If you have a good credit rating and have all documents ready to submit, an unsecured bank loan could be processed within 48 hours. However, if you are applying for a secured loan the bank will need to check the value of any assets, which can increase the processing time.

If you need the funds quickly, we work with a range of lenders who can provide loans within just 24 hours. There are numerous business finance options available, so if a standard bank loan does not fit your requirements, we can assist you in applying for anything from merchant cash advances to asset finance.

To find out more about applying for a competitive bank loan for business, bank finance or any other form of lending, please contact our experienced team today. By discussing your individual business in more detail, we can help you decide which form of lending will be the best option for your specific requirements.

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